ABSTRACT
Legacy is particularly relevant to private equity investments for two reasons. First, value is more easily built if the seasoned and skilled team is already in place. Second, and even if the private equity firm encourages the portfolio company's leadership to improve its ranks, a potent team is more appealing to the buyers constituting the investment exit. This is even more important for financial buyers, that is to say other private equity investors. Financial buyers are more likely to rely on the existing C-level team than strategic buyers that are more likely to eliminate duplicative positions in integration. The leader's job is to find bright people who will fit in the culture and perform in the assignment. A good process includes projecting future talent requirements for the business strategy relative to growth. At business inception, organizational ranks are thin and employees must multitask despite the inherent multitasking inefficiencies. Some entrepreneurial governance models retain centralized control because of leader's discomfort zone.
