Is nothing left untouched?
intercst
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Very little after more than half a century, but it little to do with private equity.
DB2
Maybe, because everything changes over time (except dead things). However, PE seems to hasten the demise of many things - lately my pet peeve is dentistry, they are taking over practices left and right and it isn’t very easy to find out if they’ve taken over. Well, it’s not easy BEFORE you go to the dentist, AFTER you go to the dentist it is trivially easy to know when PE has taken over (they recommend hundreds or thousands of dollars of extra work). They’ve also taken over a lot of roofing and HVAC businesses. For HVAC you can tell with just a simple quote - the PE owned outfit will always quote 50-150% higher than a normal human-owned HVAC business.
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You don’t even have to do that. If their website/vehicles are covered with anthropomorphic animals it is owned by a PE firm. Because nothing says furnace repair like a big, friendly dog wearing overalls.
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Apparently they are getting more clever. They are NOT doing this (standardizing on a logo or whatever) anymore. Instead they are leaving ALL branding as is - “McTavish Family Dentistry” remains, the big tooth logo remains, and the “family friendly” tag remains, and when you call, they answer “McTavish Family Dentist, how can we help you?”. Same for HVAC. When they buy out grandpa’s HVAC company, because all the grandkids want desk jobs and won’t take over the family business, they also buy the rights to the name in perpetuity.
It really is kind of nefarious.
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OK, but that is different than replacing bowling equipment that is over a half-century old. There are people who want a 1966 Ford Mustang, but very few people actually buy/use one.
DB2
Of course it’s different, everything is different in its own way. But the conversation isn’t about specifics, it’s about how PE destroys traditional industries. They are destroying bowling by changing the game, and they are destroying dentistry by turning dentists into employees (that are measured proportional to profit and fired if lacking in that department) instead of individual caregivers (where you see the same dentist throughout childhood, and then switch to an adult dentist at some point, the only other time your dentist changes is when you move, or when your dentist retired).
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I think DrBob’s point is that this isn’t really supported by the video. It’s not private equity that’s ruining bowling by changing the game, it’s the equipment manufacturers by switching away from free pin setting machines. Per the video, uptake of the string pin system is actually very high among independent bowling facilities, as well as the big chains and whichever lanes might happen to be owned by private equity.
It’s probably not a PE story. It rhymes with what people hate about PE entering industries and changing them, but it’s probably not actually PE that’s causing this to happen. The free pin bowling experience was made economically viable by a lot of sunk costs back in the 1950’s-1980’s, and now that the equipment that was installed back then is nearing the end of its useful life it may not be able to continue. Which may suck (former high school league bowler here), but isn’t something you can necessarily lay at the feet of private equity.
Indeed. “Private equity” has become a cause celebre for some and is applied even when not appropriate.
DB2
In reply to no particular person; my long term gripe over the PE boogyman is the fact that there are always two parties: The current owner and the new buyer. Why is the focus always on the new buyer? Clearly the current owner is a “sell-out” and likely took the highest bidder. Should not the outrage be as much, if not more so, focused on the person/entity that decided to sell to a potentially unscrupulous PE?
And how is PE necessary any different that any other private business transaction? The overwhelming majority of business sales are private (over 90%). It logically follows then that method of funding the purchase (PE is funded by pooling funds) should not be the discriminating factor. Someone using their own money to buy a business doesn’t make it any better or worse than if they had other investors. Profit motives should be consistent.
Hawkwin
Who blames the prior board of Twitter as much if not more so than Musk for the eventual toxicity of X. They largely knew what the outcome would be when they sold-out.
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For two reasons. First, because the gripe is usually over how the businesses end up being run, not over the fact that they were sold. So naturally the unhappiness gets directed to the new folks. Unlike when counterculture idols like rock stars “sell out,” the ire isn’t aimed at the mere fact that the sale took place, so the seller doesn’t get as much flack.
The second is that the sellers are (for the most part) more sympathetic figures. Typically these are founder-owners of small businesses. Folks who started their company, built it up with a lot of hard work and sweat equity, but whose kids don’t want to take over the elevator repair or pest control company their dad built up now that dad has reached retirement age. It’s very understandable that they’re selling their business.
I think the unhappiness is that the PE guys are coming in with a specific approach to running the business(es) that differs greatly from how founder-owners have typically run the business. The PE guys in this wave are (generally) professionally trained finance guys who are looking to take steps to rapidly grow the profits/revenues of these businesses - so you get a quick sharp change in how the businesses interact with their customers. Said customers don’t always like that change, since one person’s “improved efficiency leading to stellar growth” is another person’s “enshi!!ification.”
Money Stuff: Elevators Won’t Repair Themselves | NewsletterHunt
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But that’s my point. PE (or how the purchase is funded) does not determine how the company is run under new management. If you own a business and you sell to a nefarious PE company, you own that decision. No one made you sell to them.
If I sold my house to a data center developer - should my neighbors be mad at me or the developer? Our local town council is in the process of rezoning a residential area near my home into big box retail. They are going to turn a wooded lot (with deer, and other wildlife) that is adjacent to homes of millionaires into a grocery store. I don’t blame the grocery store, I blame the town council that is making the possible.
I don’t fault them for selling. More power to them - but if you sell to the highest bidder and that entity is unscrupulous, then you own that decision.
I don’t disagree - but that is again why I think the seller has some responsibility. If I owned a company where I greatly cared about my employees and my customers, then selling to the highest bidder - one that has a history of behaving such a way - should take a back seat to making sure my employees and customers are cared for after my departure.
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They can be mad at both, under your Scenario 1. But if you sold your house to an ordinary person, and once they moved in he turned out to be a crappy neighbor (loud parties, leaving junk in the yard, etc.), they’d be mad at the neighbor and not you under that Scenario 2. Most folks aren’t going to think you own the actions of the person you sell to, rather than that person being responsible for their own choices, except in pretty limited circumstances. Not your fault the ordinary person who came in with the best bid on your house turned out to be a crappy neighbor, and not your responsibility to take less money for your house and vet all possible purchasers on how neighborly they’ll be.
Obviously, most folks think of this particular situation as being more like Scenario 2 than Scenario 1.
Really? Again, if I sell my house to the person who happens to make me the best offer, and they end up being a really bad neighbor, I don’t “own” that decision. It’s not my responsibility to vet possible homebuyers on whether they’re good neighbors or not.
And I’m not sure that these are necessarily “highest bidder” situations rather than “only real bidder” scenarios - which is why I think you don’t see the dynamic you’re describing. For these small family-run businesses, if the kids don’t want to take over, there may not always be a lot of viable succession plans.
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We are not talking about a scenario where you know nothing about the purchaser (as is often the case with a personal home sale). If I own a business and am selling it to another entity - and that entity is a large multimillion, perhaps multibillion dollar company - it is fair to assume one might have an idea of how they have handled other business purchases in the past.
Take Lucky Strike Entertainment - the entity buying hundreds of bowling alleys. It takes about 30 seconds to do a google search about them to find out how they operate.
Perhaps not, but in that same 30 seconds of a google search, I found Lets Go Bowling which is an alternative. Selling out isn’t always necessary, even for bowling alleys.
Selling a bowling center isn’t just a real estate transaction — it’s handing off a legacy. At Let’s Roll Bowling, we understand that because we’ve been on both sides of the lanes.
We’re owner-operators, not private equity. We buy bowling centers to operate and improve them, not strip them for parts or flip them for short-term gain. When you sell to Let’s Roll, your center stays a bowling center — serving families, leagues, and the community it was built for.
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Lucky Strike is a publicly traded company, not a private equity firm. It had a brief stint being owned by PE for four years, but had already grown to its present size long before the PE involvement.
Are they? These guys own all of three bowling alleys in small towns in Kansas and Arkansas. They might be looking for a fourth, but they’re not likely to be a real alternative for bowling facilities to sell out to.
For most of the types of small businesses that private equity is moving into (pest control, lawn care, elevator repair, HVAC, plumbing, electrical and other founder-owned companies), there isn’t even a Lucky Strike/Bowlero alternative to PE to sell out to. A lot of those small independent businesses won’t necessarily have an alternative company to take over if the kids don’t want to follow in dad’s footsteps. A good number of them will just sell their stuff (and perhaps their customer lists) and close up - go out of business when the founder retires.
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I don’t think that is relevant to my point that a business owner has the ability to research the buyer prior to the sale. Ideally, they would take more than 30 seconds.
Again, not really relevant. It wasn’t about Lets Go Bowling but about the fact that with a bit of research, one can likely find alternatives. I would certainly think the BPAA (The Bowling Alley Trade Association) would be a resource for owners that wish to sell.
Besides, you appear to be arguing that the ONLY ability for someone to sell their small business is to PE. Is that your position? If it isn’t, then you obviously acknowledge that alternatives exist.
The fact remains that most small business that are sold are to other sole owners or individual buyers, not PE.
Sure, but the “buyer” for the type of transactions we’re talking about is going to be a fund or an SPE or some other vehicle for a bunch of investors. They’re not going to be like Lucky Strike, which has its own Wikipedia page. Our seller isn’t going to be able to find out very much about it at all - probably nothing. They might generally know that these are investment funds or whatnot, but unless they know to research people’s general philosophical objections to private equity “ruining” things, there’s no reason for them to conclude that these folks aren’t appropriate to sell to.
Of course there are alternatives, sure. But I think the reason that people don’t have much animus towards the folks who are selling their pest control or elevator repair business to PE investors upon retirement is because such alternatives aren’t so thick on the ground that it’s reasonable for someone to refuse a good offer from an investment shop. We’ve all seen plenty of small businesses make the announcement that they’re closing because the older folks who built the business are retiring.
That’s borne out by the statistics. When the founder-owner retires, the overwhelming majority of small businesses close down rather than sell. That bizbuysell.com site you mentioned has a close rate of less than 7% - more than 90% of the businesses listed on that site won’t sell.
Succession planning statistics in 2025: preserving a legacy
I think the public just generally intuits that it’s pretty hard to sell a small, independent family-run business when the founder-owner is ready to retire. Possible, perhaps - but not so easy that they’re going to blame the founder owner if he sells to a willing buyer who has access to capital, rather than jump through massive hoops (and possibly lose everything) trying to find someone else.
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