Feb 20, 2012

What Private Equity Can Teach Entrepreneurs

It is rare that private equity will offer an entrepreneur anything more than indemnification or a really rough and painful life lesson, which is why I found the article in Strategy and Business Finance that offered entrepreneurs the "Seven Value Creation Lessons from Private Equity" wonderfully refreshing.  The lessons are so simple, and yet I find many entrepreneurs, myself included, deviating from them everyday.  Personally, I think every business owner should have these seven lessons printed on a card, kept on their persons, and reviewed daily!  Seriously.

  1. Focus on value (relentlessly)
  2. Cash is king (always)
  3. Time is money (but money is not always time)
  4. Use a long term outlook (don't panic)
  5. Assemble the right team (including understanding your strengths and weaknesses)
  6. Link pay to performance (for the entire team)
  7. Select (and use) goals and performance measures
While fresh business education material is often difficult to find, sometimes a fresh take on old basics is just what the doctor ordered.  This is definitely served up by S&B authors Vinay Couto, Ashok Divakaran, and Deniz Caglar.  Now, I'm waiting for the next series of lessons served up by Wall Street ... which I hope come from Family Guy's Stewie Griffin: