In this response, Luis provides insights into the differences between working in finance for a private equity-owned company and a privately owned company that does not have institutional investors. He starts by pointing out that the ownership structure determines the growth trajectory of a company, including how quickly it can grow and what it can invest in. Private equity firms, in particular, tend to have a portfolio of companies with preferred strategies and playbooks that they leverage strongly.
The most significant difference, according to Luis, is the ongoing reporting cadence. Private equity firms are much more involved than venture capital or privately owned companies. They require a level of sophistication in business planning, creating a budget, and defining go-to-market strategies that demands more rigor in decision-making. While a private equity-backed company has the autonomy to make its own decisions, it must also respect the interests and expectations of the private equity firm.
In the case of Luis' company, Harbor, it is a platform portfolio company, which means it was acquired by a private equity firm with the intention of growing through mergers and acquisitions (M&A) and adding similar competitors to the company to make it the platform of record. Private equity can be very beneficial to a company because of the level of sophistication it brings in terms of business planning, budgeting, and strategy definition.
Overall, Luis provides a valuable perspective on the differences between working in finance for a private equity-backed company and a privately owned company that does not have institutional investors. Private equity firms demand a higher level of rigor in decision-making and tend to have preferred strategies and playbooks that they leverage strongly. However, they can also provide benefits to companies such as Harbor, including more sophisticated business planning and investment strategies.