The title could be generalized to "Private equity firms ruins companies"

PE are vultures: vultures feed on dead animals, not healthy ones. You don't sell off a successful, thriving business to be gutted and restructured because you're going to make much more money keeping it going the same way.

"Private equity backed companies are 10 times more likely to go bankrupt than public companies." - is this because they're running successful companies into the ground or because the kind of companies that get eaten up by PE are the ones that are failing anyway?

A single example is insufficient, especially when that example is Drupal.

In a former life I evaluated WordPress, Drupal, and some other open source CMSs. Drupal seemed remarkably terrible. Maybe I just wasn't the target user...but UI, UX, and DX all seemed blighted and the ecosystem much less vibrant than WP's. Came away thinking it was a vestige of yesteryear, and not something in which to invest any time, energy, or money.

Maybe that's a harsh take on Drupal, but one already-seemingly-in-decline property from which one PE firm extracted value... if over-extraction and under-investment really is a systemic problem of PE, there must be many more, much better examples.

I've seen firsthand how PE ruins startups. I joined a seed co and our founder went with a PE firm rather than a VC for our next round. The VCs were upfront about job cuts but the PE investors did not say anything until they took over.

Needless to say, the founder got a good paycheck but we were left holding the bag.

It was a bloodbath and they completely ruined the culture, product, morale, and any semblance of growth. It was personally the most stressful period of my working life...

From then on, the moment that I see private equity mentioned anywhere, I know its time to run.

This reads like it was written by generative AI. Private equity is often the vulture a company is sold to when the founders can’t take it public or find a symbiotic merger first. In a traditional LBO it loads the company with debt, based on a steady stream of cash flows. The cash flows are key. It’s akin to having a wild stallion which grew up fast and beautiful and then putting a saddle on its back and an ore behind it. In public companies that looks like going from a growth stock to a dividend stock to a high dividend stock that people only buy for tax purposes because the dividend is less than the devaluation in stock price over time. You can look at the financial statements of companies or the details in any stock app and you can see where they are at in this maturation curve. Then invest your time and money accordingly.

It seems like none of the issues with wpengine have anything to do with private equity. The article just said private equity sucks, which sure i will grant, but that doesn't say anything about this particular conflict. Private equity isn't responsible for literally every sin in the world.

I feel like this article is essentially a smear piece - wpengine is associated with private equity therefor is not deserving of sympathy. Or something like that.

This is an aspect of the Wordpress vs WPEngine I hadn’t considered. Does anyone who’s more familiar with WPEngine than me know if the VC ownership has affected its behavior?

This is not really news. The question is, what there is to do? I think that it is logical to sell your company to highest bidder when you want to exit, and often the highest bidder ends up being a PE firm.

Even if that's true, that's even less reason to attack them and make yourself look terrible. Just wait and they'll destroy themselves.

Private Equity ruins nursing homes.

It would be good to explain the difference between PE funding and VC funding.

Hmm, why was this removed from a homepage?

Reading this makes me change my view on PE a little. Beforehand I would have just been in the "PE is bad" camp. But if you look into how a PE company like Silver Lake works and their prior purchases, it's not asset stripping. It seems much more like taking a bet they can turn an underperforming public company into a well performing private one and cash in the difference, usually with a partner who has a plan on how to do the turnaround.

That's not to say it's good. It's just another investor tool like VC money. And it's probably also a simplification to say it's all about short term profit when they talk about being able to take companies on longer term strategies than the public market would allow for.

Also, Water Wet

Is there a company out there that has survived a gutting by PE?