Wealth Without the Work: How to Get Paid Twice for the Same Company

Second Bite - Next Check

For some business owners, selling to private equity is the big payday. The Big Kahuna. The day the war ends, and champagne starts flowing. For others, it feels like a trap - a velvet handcuff that turns their life’s work into someone else’s cash machine. But whether you’re exhilarated or uneasy about selling, understand this: in the world of serious money, private equity is where the grown-ups play. And if you’re not playing to win in that arena, you might be leaving more than money on the table. You might be missing the point entirely.

Let’s start with the basic deck: there are really three kinds of money. Public money - that’s the stock market, where the masses invest in companies they don’t understand. Government money - printed, taxed, redistributed, and often weaponized. And private money - the murky, strategic, high-leverage world of hedge funds, family offices, private equity, and off-market deals. That’s the world where the players know the rules - and more importantly, they know when (and how) to break them. That’ my world.

Private equity firms don’t just buy companies - they buy cash flow engines. They build portfolios designed to spin off free cash and generate exits. Often, the model is deceptively simple: find a few good companies in the same space, roll them up into a single platform, cut costs through economies of scale, then flip the portfolio for a multiple premium. If it sounds cold, that’s because it is. But it’s also brilliantly effective.

Here’s where it gets interesting. Most small business owners work their entire lives optimizing their company. They cut fat, build customer relationships, maybe invest in culture or tech. But even at their best, they’re fighting alone. Private equity doesn’t fight fair - and that’s the point. They aggregate purchasing power. One owner buying a million in supplies gets no leverage. Ten rolled-up companies buying $50 million worth? That’s a knife to the supplier’s throat. And it’s legal. This isn’t about being mean - it’s about being effective.

Ironically, the moment an owner sells to private equity is often the first time their company becomes truly scalable. Not because the owner was wrong, but because they were limited. Time, capital, talent - all in short supply. But PE firms come armed. They bring capital, connections, process, and people. And when they roll up 10 companies in 10 regions, suddenly those regional players start feeding each other business. What used to be a bottleneck becomes a pipeline.

Now here’s the twist most owners never see coming. Many think selling means cashing out and walking away. And yes, sometimes it does. But the real players don’t walk. They stay in the game. Because smart PE firms will invite the seller to keep a piece of the equity - the second bite of the apple.

Why? Because that second bite can be bigger than the first. The PE firm does the hard work - finds synergies, reduces costs, drives new revenue - and flips the asset to the next buyer, usually at a higher multiple. Maybe they bought in at 10x EBITDA and sold at 16x. That delta is where real wealth is created. The original owner who stayed in the deal walks away with not just the proceeds from the first sale, but a second payout that might make the first one look like a down payment.

It’s almost absurd: the former owner gets paid twice for the same company - once for what they built, and again for what someone else built on top of it. It’s wealth without the work, at least the second time around. And that, right there, is the part nobody tells you.

There’s a lesson in this: Advantage Players® don’t aim for just one payout. They structure their deals to win again. They understand leverage. They know that sometimes giving up control is the best move - if it puts them in position for a bigger score down the road. The casino player in me says this is the only time in business when you hit Blackjack, and the dealer still lets you draw another card.

Want to win in this game? Stop trying to run the table yourself. Find the players who already have the stack, the strategy, and the speed. And be smart enough to stay at the table.

Have you ever taken a second bite at the apple? Or did you cash out too soon?

Move the Needle

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