Why You Should Consider Normal Bank Loans

By the time private equity is ready to invest in you (>$10M trailing), you should already have an intermediate, if not veteran, understanding of CPG finance, route-to-market options, etc. You probably are already competent enough to persist. You just need to take the team’s discipline up a notch.

And that is precisely the topic private equity General Partners are masters at using to their advantage.

They will lean in with questions like: 

Can you really professionalize to run a midmarket company? Or are you just a goofy entrepreneur who is best at starting stuff but crappy at scaling it?

Do you really understand finance well enough? Really? Really? 

The potential for extreme gaslighting here by a private equity GP knows no limits behind closed doors. If you can withstand this performance, fine; you may still want to move ahead. Although, honestly, if they’re gaslighting you, they have played their cards. They think you’re incompetent. 

Do you want to get into bed with a condescending sexual partner? Probably not if you’re the kind of person who started and grew a business to $10M and beyond.

But, here’s the thing folks that everyone forgets. Remember the Chase bank loan officer down the street I mentioned? She really, really, really will not bother you at all, ever, as long as you make your monthly payments. She doesn’t want a seat on your Board. She doesn’t text you at all hours with random suggestions, mostly half-cocked and poorly thought through. She has firm impulse control, which is why Chase lets her sign off on commercial loans. 

She doesn’t insist on weekly round-ups and debriefs that enable passive-aggressive micro-managing either. 

The commercial loan officer wastes your time upfront and then leaves you alone. Ahh. Calgon, take me away to commercial loan land. 

Doing a Series A with institutional funds will waste even more of your time than Chase bank would. And honestly, it might take longer, too, unless you’re in one of those FOMO zones of the moment, like plant-based everything was five years ago. 

Dr. James Richardson

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