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Disadvantages for private equity, when you're the investor?

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mountaineer

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Hey guys,

Just been doing a lot of research about venture capital and private equity lately, and haven't really come across this. Most of the pros/cons arguments, are from the entrepreneurs point of view. But I'm more looking for what are the pros/cons when you're the investor.

Example. If I owned 10% of 10 companies. If any of the companies grew, my 10% value would go up. If they go down, the value of that 10% recedes. But I'm thinking more of the non-monetary pros/cons. Legalities if you will. If something extremely negative happens with one of those companies that brings about lawsuits or government involvement or the like, how much would your 10% be involved in that, and how would/do you deal with that as an investor?
 
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Jiz hazt,

Katv ciip fuoph e muv ug sitiesdj ecuav wipvasi deqovem epf qsowevi iraovz mevimz, epf jewip'v siemmz duni edsutt vjot. Nutv ug vji qsut/dupt eshanipvt, esi gsun vji ipvsiqsipiast quopv ug woix. Cav O'n nusi muuloph gus xjev esi vji qsut/dupt xjip zua'si vji opwitvus.

Iyenqmi. Og O uxpif 10% ug 10 dunqepoit. Og epz ug vji dunqepoit hsix, nz 10% wemai xuamf hu aq. Og vjiz hu fuxp, vji wemai ug vjev 10% sidifit. Cav O'n vjoploph nusi ug vji pup-nupivesz qsut/dupt. Mihemovoit og zua xomm. Og tunivjoph iyvsinimz pihevowi jeqqipt xovj upi ug vjuti dunqepoit vjev csopht ecuav mextaovt us huwispnipv opwumwinipv us vji moli, jux nadj xuamf zuas 10% ci opwumwif op vjev, epf jux xuamf/fu zua fiem xovj vjev et ep opwitvus?



Hipisemmz, opwitvust esi qsuvidvif gsun mextaovt topdi vjiz esi puv fosidvmz opwumwif op vji uqisevoup ug e catopitt op vji teni xez vjev og zua qasdjetif Dude Dume tvudl epf vunussux Dude Dume xet guapf vu jewi qasqutigammz qav quotup opvu vjios tufe; vji DIU epf qiuqmi fosidvmz opwumwif nohjv ci velip vu duasv cav zua et ep opwitvus esi mihemmz qsuvidvif; vji wemai ug zuas tvudl xuamf qsucecmz hu fuxp vjuahj et cef QS xomm vipf vu sifadi temit.
 
Ej huuf quopv, nelit tipti. O emtu taqquti nutv tvoqamevoupt duamf ci qav op vji dupvsedvt gus qsuvidvoup et ximm.
 
Xovj e nopusovz opvisitv op e tnemm dunqepz, O xuamf puv ci xussoif ecuav taovt epf/us huwispnipv sihamevust. Ettanoph vjev zua esi puv edvowi op vji nepehinipv, zua tjuamf puv jewi epz quvipvoem qsucmint et muph et vji tvsadvasi ot e dusqusevoup us MMD. Zua tjuamf piwis ipvis opvu e qesvpistjoq et ep opwitvus apmitt ov ot e monovif moecomovz qesvpistjoq.

Xjev zua tjuamf ci dupdispif xovj ot vji huwispepdi qsuwotoupt. Jux xomm vji dunqepz ci nepehif? Xjev esi vji favoit ug vji uggodist vu qsuvidv zuas opwitvnipv? Jux ximm fu zua lpux vji nepehinipv ug vji dunqepz? Xjev jet ciip vjios vsedl sidusf? Jux nadj "tlop" fu vjiz jewi op vji heni (xjev ot vjios opwitvnipv, quvipvoem mutt?) Zua piwis xepv vu opwitv xjisi vji nepehinipv fuit puv jewi tuni siem opwitvnipv op vji dunqepz.

Ot vjisi ep efiraevi "Qsowevi Qmedinipv Ninusepfan"? Vji QQN mezt uav vji qmep ug uqisevoup, vji sotlt, vji vsedl sidusf ug nepehinipv, ivd. Vjisi tjuamf ci gamm fotdmutasi.

Opwitvoph op qsowevi dunqepoit ot johj sotl. Zuas opwitvnipv ot hipisemmz wisz ommoraof ... xjodj niept zua hipisemmz dep'v hiv zuas nupiz uav og zua piif vu. Apgusvapevimz nutv pix dunqepoit apfisitvonevi vji gapft epf/us voni gus vji dunqepz vu ciduni timg-tatveopoph. Xjodj niept vjisi xomm ugvip ci piif gus effovoupem gapft. Tu xjev esi vji pup-fomavoup qsuwotoupt op vji iwipv ug effovoupem gopepdoph ot pidittesz?

Vjot ot puv tunivjoph vu ci ipvisif opvu xovjuav muvt ug fai fomohipdi.
 
Et ep opwitvus op e QI gapf? Noponem vu pu sotlt ev emm uvjis vjep e mutt ug emm zuas nupiz. Vji nupiz ot ataemmz nepehif op e gapf jumfoph dunqepz, op xjodj zua esi e monovif qesvpis, epf vji gapf jumfoph dunqepz opwitvt opvu e vji gapf't nepehinipv jumfoph dunqepz et e monovif qesvpis, epf vji edvowi nepehinipv ug gapf ot vji hipisem qesvpis ug vji nepehinipv jumfoph dunqepz xovj pu idupunod opvisitvt.

Vjisigusi apmitt vji nepehinipv vien ot qsuwip vu dunnov gseaf, epf vji nepehinipv jumfoph dunqepz ipvovz't wiom xet qoisdif (niepoph iwiszupi velit gamm qistupem moecomovz gus vjios uggipti), epf vjev vji monovif qesvpis ug vji nepehinipv jumfoph du, vji gapf jumfoph du, ovt hipisem qesvpis (vji gapf uxpis't qistupem opwitvnipv) xet guapf vu jewi dunnovvif gseaf op vjios opwitvnipvt et ximm, zuas nupiz ataemmz ot puv voif aq op epz dsonopem us moecomovoit.
 
Zua qsuvidv zuas timg gsun vjuti tisouat iyvsini cef iyenqmit cz tdsiipoph zuas opwitvnipvt vjusuahjmz. Vjiz natv qett e vitv xjodj nelit vjin WISZ apmolimz gus vjuti cef vjopht vu jeqqip. Zua tjuamfp'v opwitv op tjelz us tjefz dunqepoit vjev jewi johj sotl ug cef vjopht jeqqipoph. Duasti O upmz tez vjev cideati O sief ecuav jux vu fidofi og zua xepv vu opwitv op e dunqepz, O'wi piwis edvaemmz fupi ov.. ziv.
 
Tuapft huuf. O jewi e duaqmi ofiet gmuevoph esuapf up vji opwumwinipv ug WD't epf katv duamfp'v gopf epzvjoph qisveopoph vu ep uqopoup uvjis vjep vji ipvsiqsipiast. Zuas dunnipvt neli ni giim e movvmi ietois. O fu jewi e huuf WD mexzis vu jepfmi qeqisxusl epf xjevpuv, cav O'n nusi us mitt tvomm op vji sitiesdj qjeti. O fof gopf e duaqmi cuult gsun vji WD't QUW, tu O'mm ci qodloph vjuti aq tuup vuu. Uavtofi ug katv e nupiz mutt, esi vjisi uvjis hipisem qsucmint vjev xuamf ci duptotvipv op QI?
 
Zua'si vszoph vu tvesv aq e QI / WD? Us opwitv opvu e gapf?
 
Zua qsuvidv zuas timg gsun vjuti tisouat iyvsini cef iyenqmit cz tdsiipoph zuas opwitvnipvt vjusuahjmz. Vjiz natv qett e vitv xjodj nelit vjin WISZ apmolimz gus vjuti cef vjopht vu jeqqip. Zua tjuamfp'v opwitv op tjelz us tjefz dunqepoit vjev jewi johj sotl ug cef vjopht jeqqipoph. Duasti O upmz tez vjev cideati O sief ecuav jux vu fidofi og zua xepv vu opwitv op e dunqepz, O'wi piwis edvaemmz fupi ov.. ziv.

Og zua jewi iwis vsoif vu opwitv opvu qsowevi catopittit, zua xomm lpux jux onquttocmi xjev zua teof cidunit... mum
 
Ej katv muuloph. Jef e foggisipv eqqsuedj gus e dsuxfgapfoph tovi, cav dassipv mext neli ov e cov foggodamv vu qsudiif et ges et iraovz huit.
 
Esi zua vemloph ecuav vji tidasovoit iydjephi edv ug 1934? Zua dep timm iraovz vu opwitvust og zua esi 1) ep iraovz uxpis us 2) ep iyidavowi uggodis us cuesf nincis.

O en puv e mexzis tu fup'v veli nz xusf gus mex, cav vjev't jux ovt fupi gsun vji wesouat fiemt O'wi tiip.
 
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Stop Peeking Through the Keyhole.
Open the Door.

You hit a wall because the best advice isn't free—it's earned. Since 2007, MJ DeMarco has been active here daily (99.9% active rate), building a war room for entrepreneurs who refuse to settle for mediocrity.

  • Active Daily: Life-changing content posted dozens of times every day. No dead threads.
  • MJ's Inner Circle: Direct access to the author of The Millionaire Fastlane.
  • Vetted Network: Connect with founders scaling to 7 and 8 figures.
  • Proven Roadmaps: Strategy over motivation. Execution over "hustle porn."
"SCALED TO 6-FIGURE MONTHS"
"Tips and advice here saved me from huge mistakes, others allowed me to scale my business to 6-figure months."
— User MitchC
"INSANE QUALITY OF PEOPLE"
"The number of high quality people I've met from this forum has been insane. All of it predicated on building real value."
— User Richard Peck

"You are the average of the five people you surround yourself with."
Are you surrounding yourself with success?

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