Business

Investor Mark Hauser on Private Equity and Founder-led Organizations

Private equity is a form of investing, often with other people’s money. It uses insights from years of experience and deep knowledge of different global markets to find undervalued companies. Private equity firms can then improve these businesses by providing strategic advice, improving management and governance, and injecting capital earned through profitable investments to fuel growth. Mark Hauser is one of the leading investors in private equity and has started several businesses himself. He has also been involved in numerous start-ups. Over 20 years, he has put more than $1 billion into over 100 companies.

Founder-led organizations have a strong sense of purpose and identity that is deeply embedded in the organization’s DNA. When these firms come to the table for investments, their sense of purpose naturally aligns with any investor’s long-term value creation strategy. They tend to be much more open than other private equity and asset-backed companies, more committed to their purpose, and harder to leave. They have been shown to have much more excellent outcomes for investors compared with other PE firms and public companies. Mark Hauser believes that any investor can identify a founder whose sense of purpose and identity is aligned with their investment thesis, who will work closely with them, and who is willing to bring their team into the fold on a longer-term basis.

Mark Hauser says there is an essential difference between private equity and founder-led companies. While private equity looks for companies looking to evolve and grow, founder-led organizations are based on a more disruptive concept. The challenge is not to find companies that want to develop and grow but to find businesses with something profoundly new and innovative. Many of these businesses will start small, so they need much less capital than other businesses looking to scale up. What private equity firms like Hauser do offer founder-led companies is access to expertise in critical sectors, capital investment, and the benefit of network and shared experience.