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Managing Customer Concentration Risks in Private Equity Deals
The chapter covers the impact of customer concentration on private equity deals, with high concentration levels posing significant risks. Strategies such as adjusting revenue percentages and using contingent payments like earn-outs are discussed to mitigate these risks and make the company more attractive to buyers. The importance of recognizing the issue early, diversifying the customer base, and planning for future transitions in business ownership are emphasized for a successful deal.