Private Equity for Founders: How to Scale and Exit the Right Way
In this episode of Tech Leaders Playbook, we welcomed Adam Coffey - bestselling author, serial CEO, and one of the most trusted authorities on private equity for founders. With 58 acquisitions and exits to his name, Adam has helped build and sell companies worth billions. Now, he’s on a mission to pull back the curtain on private equity and show founders how to build scalable, exit-ready businesses.
Private Equity Doesn’t Mean Selling Your Soul
Private equity for founders often carries baggage: horror stories about culture clashes, burnout, and short-term thinking. But as Adam makes clear, it doesn’t have to be that way. “The companies I built had great cultures and strong financial outcomes. These things aren’t mutually exclusive,” he says.
He recalls how Ares Management, one of the largest non-bank lenders in the world, created internal foundations during COVID to support employees across their portfolio. “They seeded each one with six figures and said, ‘Take care of your people,’” Adam shares. It’s a side of PE that rarely gets coverage—but it matters when choosing a long-term partner.
For founders, that’s a key lesson: who you sell to matters. You’re not just giving up equity—you’re choosing collaborators, stewards of your culture, and architects of your next chapter.
Founders Must Master the 30-20-10 Rule
One of the most practical frameworks Adam shared was his 30-20-10 rule, a must-know for any founder preparing for scale:
30% gross profit
20% or less in general and admin costs
10%+ net profit
If your business can’t hit those benchmarks at the unit level, it’s not ready for private equity—it’s not even ready to scale. “You don’t fix bad math by doing more of it,” Adam warns.
In his book Empire Builder, Adam walks founders through how to take a small service business and scale it into a high-margin machine. It starts by getting clear on your economics before you ever try to grow.
Build for the Company You’re Becoming
Adam also shared wisdom around hiring: “Don’t hire for the company you are. Hire for the company you’ll be in five years.” That might mean overpaying for talent who can stretch with you—people who’ve seen the next level and want to build it again.
But, he cautions, be selective. Many execs from large companies may not be suited for scrappy environments. Ask: Did they help build that company? And are they willing to roll up their sleeves again?
At HIRECLOUT, we’ve seen that founders who ask these questions early tend to build more adaptive, growth-ready teams—especially when preparing for a future with PE partners in the mix.
To learn more about private equity for founders, grab Adam Coffey’s books Empire Builder, The Private Equity Playbook, and The Exit Strategy Playbook. You can also connect with him directly on LinkedIn.
Thanks again to Adam for sharing his wisdom with us. For more founder-focused leadership insights, check out HIRECLOUT and subscribe to Tech Leaders Playbook. The next conversation’s just around the corner.
