How Private Equity Uses Ownership to Incentivise with Andrew Bartlow,

Description:

Welcome back to the FNDN Series, where we continue our deep dive into startup compensation with industry leaders from across the startup world. In our conversation with Andrew Bartlow, a seasoned HR professional with 30 years of experience and current PE operating partner, we demystify how private equity really works and explore the powerful but lesser-known world of profit interests. Andrew breaks down common PE misconceptions, explains how profit interests differ from traditional stock options and RSUs, and reveals why these flexible ownership structures can create significant value for employees at all levels. Keep watching to discover how PE firms are moving beyond the "cut costs and flip" stereotype to build genuine value through strategic growth and broad-based employee ownership.

Chapters:

00:44 Guest Introduction: Andrew Bartlow's 30-Year HR Journey

03:41 Private Equity 101: How PE Actually Works

05:58 Understanding PE Stakeholders and Their Incentives

08:40 Debunking PE Myths: Growth Over Cost-Cutting

11:31 The Reality of PE Value Creation

12:25 Profit Interests Explained: The PE Ownership Model

15:51 Comparing Profit Interests to Stock Options

19:54 Flexible Program Design for Heads of People

22:28 Broad-Based Employee Ownership and Communication

23:16 Conclusion and Wrap-Up

Connect with Andrew

Visit: https://linkedin.com/in/bartlow/

The People Leader Accelerator helps HR professionals and their organizations to grow. They exist to support the success of Human Resources leaders.

Resources Mentioned:

Companies/Organizations Mentioned:

Ownership Works - Nonprofit promoting broad-based employee ownership in PE, spun out from KKR

KKR - Major private equity firm pioneering employee ownership initiatives

People Tech Partners - Community where PE compensation discussions take place

Culture Amp, Pepsi, GE - Companies mentioned as part of Andrew's background

Key Concepts Discussed:

409A Valuations - Startup valuation methodology for stock options

Leverage in PE transactions - How debt financing amplifies returns

Broad-based employee ownership - Extending profit interests to all employees

More FNDN Episodes:

Spotify: https://open.spotify.com/show/4GeBIeZOKrFxG1oiiPxmiM

Apple Podcast:

https://podcasts.apple.com/us/podcast/fndn-series/id1794263484