How Private Equity Values and Preserves Your Business | Sequoia Borgman

Blueprint for Wealth with Wayne Zell

Wayne invites entrepreneurs to share their success secrets, challenges, and experiences. He covers crucial topics such as business exit strategies, increasing company value, leadership, business culture, and asset protection.

How Private Equity Values and Preserves Your Business | Sequoia Borgman

E298 • Oct 18, 2026 • 39 mins

In this episode of Blueprint for Wealth, Wayne Zell speaks with Sequoia Borgman of Borgman Capital about how private equity evaluates lower middle market businesses and what makes a deal work. Sequoia explains the firm’s investment focus, how cash flow, leverage, and management transition affect valuation, and why trust and seller alignment can stop a transaction. The conversation covers deal structure, debt, earnouts, rollover equity, due diligence, and how long a sale can take. They also discuss legacy concerns, preserving employees and relationships, and what owners should do to prepare for a private equity exit.

Key Points

Private equity buyers focus on steady cash flow, durable business models, and management teams that can carry the company beyond the founder.
Valuation is driven less by a formula than by risk, with founder dependence, business size, industry demand, and the need for future investment all affecting the EBITDA multiple.
A successful sale depends on alignment around culture, legacy, and transition, with the best deals using structure, rollover equity, and clear expectations to protect both sides.

Speakers

Wayne Zell

Host • 42%

Sequoia Borgman

Guest • 58%

Chapters

0:00	Introduction and guest background: Sequoia Borgman & Borgman Capital
4:19	Borgman Capital's investment focus: lower middle market and preferred industries
6:12	Evaluating deals: cash flow, leverage buyouts, and key screening criteria
7:27	Deal killers: people risk, trust, and seller alignment
8:24	Valuation factors: EBITDA multiples, management transition, and business risk
11:08	Valuation as art vs. science and the role of market demand
13:03	Deal structure: leverage, earnouts, seller notes, and rollover equity
17:51	Debt, leverage, and impact of bank tightening by deal size
19:24	Private equity myths: cost-cutting, legacy, and alignment with sellers
24:03	Return targets and IRR expectations for Borgman Capital
24:56	Legacy considerations: employees, customers, and community in a sale
25:49	Preserving employees, management equity, and business name post-sale
26:56	Maintaining key relationships: people, customers, suppliers, and community
27:56	Timeline: how long a business sale takes from start to closing
29:53	Due diligence: challenges and necessity for sellers
30:56	Founder exit options: earnouts, rollover equity, and transition timing
33:45	Deal sourcing and building founder relationships
34:52	Target markets and focus on secondary communities
36:11	Exit planning, succession, and preparing for private equity
38:07	Final remarks and episode promotion

Transcript

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