Avoid These 7 Mistakes When Presenting Your Firm to Private Equity

Private equity is no longer an emerging trend in the accounting profession — it's a defining force. In recent years, private equity (PE) firms have made substantial investments in accounting firms of all sizes, from global giants to regional players. For mid-market firms, this wave of capital presents a rare opportunity to accelerate growth, gain strategic support, and build long-term value.

But with rising interest comes rising scrutiny.

Firms that stand out to investors don’t just showcase strong financials. They tell a compelling story — one that blends operational maturity, leadership foresight, and strategic clarity. Over the years, we’ve seen well-positioned firms falter not because of what they lacked, but because of how they presented themselves.

Let’s walk through seven of the most common, and costly, mistakes firms make when engaging private equity, along with practical ways to avoid them.

1. Failing to Define a Clear Value Proposition

Imagine you're a PE investor hearing pitches from ten accounting firms in a week. What makes one stand out?

Many firms assume their technical expertise or client roster speaks for itself. But PE firms are hunting for differentiated, scalable models — businesses poised for sustainable, high-margin growth.

To make your case, you need more than competence. You need clarity. What sets you apart? Are you a leader in a niche industry? Have you developed proprietary tools or streamlined advisory services? A clear, distinct value proposition doesn’t just attract interest; it anchors valuation.

2. Neglecting Succession Planning and Leadership Depth

A PE firm once walked away from a deal mid-negotiation, not because of poor numbers, but because the firm couldn’t name who would lead in five years.

Leadership concentration is a red flag. If the firm revolves around a few key partners, what happens when they retire or leave?

Robust succession planning, including a deep bench, governance clarity, and partner alignment, signals institutional durability. Investors want to know your firm is built to last, not reliant on a few personalities.

3. Overlooking Operational Efficiency and Scalability

Private equity isn’t just buying what your firm is today; they’re buying what it can become. Scalability is the engine of that vision.

Ask yourself: Are your systems consistent across offices? Have you automated key functions? Can your infrastructure support growth without imploding?

One firm we advised turned investor heads simply by showcasing its cloud-based workflow and client onboarding system. Operational maturity isn't a backend detail; it’s a front-stage differentiator.

4. Providing Incomplete or Unpolished Financials

You wouldn’t pitch a client with half-finished financials. Why do so with investors?

Beyond clean books, PE firms want to see how your firm creates value:

• Average services per client: A proxy for depth and stickiness.
• Profitability by service line: A lens on growth vs. drag.
• Debt obligations and partner payouts: Crucial to understanding cash flow risk.

Investors read between the numbers. Presenting dashboards and KPIs with confidence signals not just professionalism, but strategic control.

5. Ignoring Market Trends and Client Demand Shifts

Legacy services are not a moat.

Investors favor firms that move with the market, not against it. Those who pivot into areas like ESG reporting, transaction advisory, or digital transformation often command higher multiples.

Show how your firm thinks ahead. Demonstrate responsiveness, innovation, and a willingness to lead your clients and your investors into the future.

6. Underestimating the Importance of Culture Fit

A deal can look perfect on paper and still fail in practice, usually because of cultural misalignment.

Investors assess your operating DNA: How decisions are made, how leadership is shared, and how your people think. At the same time, firms must understand what will change post-deal:

• Will your firm retain its brand?
• Will decision rights shift to a board?
• What role will existing partners play?

Early and honest dialogue around culture and integration is not a soft conversation; it’s a strategic safeguard.

7. Approaching PE as a “One-Size-Fits-All” Solution

Private equity is not monolithic. Some firms create roll-ups under a new brand. Others maintain legacy identities while centralizing back-end functions.

Understanding your potential partner’s:

• Brand strategy
• Integration model
• Leadership expectations

...is essential before signing anything. The wrong fit can unravel years of work. The right one can multiply your impact.

Conclusion: Think Beyond the Term Sheet

Private equity investment isn’t just about selling a stake. It’s about reshaping your future. Firms that succeed approach the process with curiosity, clarity, and strategic intent.

At Hollinden, we’ve seen how thoughtful positioning can turn a conversation into a catalyst for growth. When accounting firms present themselves with insight and intention, they don’t just attract capital; they attract the right partners. Discover how we can support your growth goals.