Direct answer

What is private equity in small business?

Private equity in small business typically targets EBITDA above $1M, control or majority equity, and a three-to-seven year hold. Fit varies by firm more than by stated criteria. A small business owner reading a PE offer is reading the firm, not the asset class.

PE is structured: acquisition (usually majority or control), hold (three to seven years), thesis (roll-up, professionalization, expansion), capital structure (often debt at close), exit (sale, recap, IPO). Each of the five shapes the post-close experience.

PE is not VC. VC funds growth in unproven businesses; PE buys profitable businesses with predictable cash flow. Different stage, different math, different consequences for the operator.

PE is not a strategic acquirer. A strategic buys for synergy and integrates. PE buys for return and runs the thesis. The owner experiences these very differently in the year after close.