Understanding your goals for sale of your company will help you choose the right buyer.
BY JESSICA FIALKOVICH
Oct 28, 2025
Deciding whether to sell your business to an individual or a private equity firm can be a complex decision that comes down to two questions:
• What do you want from the sale?
• What does the buyer want?
Understanding the answers to these questions will help you evaluate which type of buyer aligns better with your priorities and can offer terms that meet your specific goals for the transaction.
When legacy matters: Individual buyer
Sellers who want to walk away from the business with a clean, simple deal should consider an individual buyer, especially if you want to preserve what you’ve built and keep your employees protected from layoffs or major shakeups. It’s also a solid choice if your company is a valued part of the local community.
With an individual buyer you’re likely to get more money upfront, which doesn’t hurt. The buyer will be looking for a business to take over and grow, in a deal that’s as simple as possible.
However, one significant disadvantage to this kind of sale is that it’s often the first time most buyers have owned a business, so they tend to be cautious. They’re probably going to take more time to decide and will need more of your time and attention as they ease into ownership.
If you want to sell and walk away immediately, with no further involvement, an individual buyer might not be ideal. However, you can make the hand-holding less of a strain by defining the length of the transition period or assigning a member of your team to act as mentor to the incoming buyer.
Bridging the value gap: Private equity
If you want an infusion of cash to build your company so it fetches a big price at exit, private equity could be your solution. Perhaps demand is high for your product or services, but you lack the necessary resources to meet it, which is negatively impacting your valuation. A private equity buyer can close the gap and bring the company to the value you know it’s capable of. But remember, private equity firms have a fiduciary responsibility to maximize returns for their investors, which could affect the deal for years to come.
We’re currently working with a client who’s seeing hockey stick growth in their client base, adding hundreds of new customers every month, but the company is just treading water; it can’t fulfill all the orders. The owners could sell if financials supported a better valuation. Private equity can help grow the business, enabling owners to sell for more money three to seven years down the road.
Going for big rewards is a high-stakes gamble; you’ll need patience and a healthy supply of risk tolerance, understanding that an optimistic forecast may not pan out. Even more critical is the willingness to cede control of the company, even if you’re still involved in the business. A private equity buyer won’t just hand over the cash you need and wish you luck; they may give control to your management team, but they could also bring in their own management team. Either way, the owner is expected to step back and have a much smaller voice in the company’s direction once the private equity sale is final.
Making the decision
Money is the most common motivator when choosing between these options, but there are other complicating factors.
For instance, what’s more important—the valuation number on paper or the cash you’ll receive at closing? If the cash is more important, understand that you may get more money, but the valuation number may be lower, which affects the total price you receive.
Are you seeking a high valuation of the company you’ve built for an ego boost? Are you comfortable swinging for a home run that could pay off in huge profits later, or would you rather just knock out a nice, safe base hit now? Keep mind that what looks like a home run can quickly turn into a pop fly and you’re out of the game.
If you want guaranteed cash up front, you probably want to go with an individual buyer, but for a larger exit down the road, your best bet may be private equity. An individual buyer is not going to have the capacity to turn around and fast-track your growth in a short-term period and take you to the next level.
If legacy and employees matter most, I would opt for an individual buyer every time. They will want to keep the team; they love the business as it is and won’t want to make significant changes. Private equity may love your reputation and your team, but their prime motivator is money. If they have to cut staff or make other changes for the health of the financials, they’ll do it.
Both choices require talking to a value growth advisor or exit strategist, someone who’s done a lot of deals and understands your goals (like a third-base coach waving you home). Don’t just make assumptions based on what you’ve heard or read—not even in this article.
Final thoughts
Life after your business exit should also be part of your decision. If you want your next phase to be safe and secure and you want to feel like it’s all wrapped up and finished, selling to an individual buyer is probably your better path. You can’t do that with private equity because some of your money will be tied up for years after the sale.
Private equity is better if you’re chasing big growth and willing to take the risk that comes with it.
Whether you’re swinging for the fences with an equity deal or just want to round the bases with an individual buyer, choosing the right path means understanding what drives the buyer as much as knowing your own goals.
