Private Equity Explained - Kyle Coots - Episode 44
Self-Funded With Spencer
00:00
How to Make Money in Private Equity
There's really three ways to make money in private equity: grow the business, go into different end markets and improve your margins. The third one is financial engineering - paying down debt over time so that you can buy a company at a higher multiple. So think of it as like very simply, if your business is worth $100 million, I'm going to give you $100 million but 50 of it's going to come from equity investors," he says. "And over time, even if that business is only worth $ 100 million five years from now, but I've paid off all the debt, my equity has gone from $50 million to $100 million"
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