Brent Beshore on the Private Equity Trap and Being Long-Term Greedy

Kyle Winder
May 26
3 min read

Not all buyers want a quick flip. Brent Beshore shares how to build long-term wealth without sacrificing your values or your team.

About this Episode

Private equity firms are the most likely buyer for your business—and some do a fine job preserving what makes a company great.

But many are financial engineers.

They offer a generous multiple, then lever up the business, cut costs, and flip it within a few years. Longtime employees get let go.

Culture erodes. You walk away with a check, but it can feel like selling out.

In this edition of Built to Sell Radio, Brent Beshore offers an alternative.

He started as a business owner—not a banker—and now runs Permanent Equity, a firm that buys companies using 30-year capital. No debt. No flip. No rush.

You discover how to:

Identify buyers who want your business to endure
Avoid the acquirers who see your company as a spreadsheet
Structure an earn-out alternative using rollover equity
Stay on post-sale—without becoming a figurehead
Protect your employees through the sale process
Position your company for a buyer who values culture
Build wealth without sacrificing your values

This episode is part of our Inside the Mind of an Acquirer series, designed to help you punch above your weight in a negotiation to sell your business.

About Our Guest

Brent Beshore

Brent Beshore is the Founder and CEO of Permanent Equity, a private investment firm that invests in North American family-owned companies with the intention of holding them for the long term—often indefinitely.

With a philosophy grounded in patience, trust, and partnership, Brent and his team manage over $300 million in committed capital, targeting businesses that are built to endure.

A thought leader in long-term investing and business stewardship, Brent is known for his candid insights into what makes companies valuable beyond the financials.

He’s been featured in Forbes, Harvard Business Review, and The New York

Times, and is the author of The Messy Marketplace, a widely respected guide on selling a business the right way.

In this episode, Brent shares what he looks for in companies, how he structures deals that benefit everyone at the table, and why the best businesses aren’t always the flashiest—they’re the ones built to last.

Definitions

Due-Diligence: This is a comprehensive appraisal of a business or investment undertaken before a merger, acquisition, or investment. It seeks to validate the information provided and uncover any potential risks or liabilities.

Earn-out: This is a financing arrangement for the purchase of a business, where the seller must meet certain performance goals before receiving the full purchase price. It reduces the buyer’s risk and aligns the interests of both parties post-acquisition.

Roll Over Investor: A rollover investor, in the context of selling a business, refers to an individual or entity that rolls some of their proceeds from the sale with the buyer. This strategy allows the seller to defer capital gains taxes and potentially leverage their expertise or resources in a new venture.

Debt Coverage Ratio: The debt coverage ratio is like a financial health check for a small business applying for a loan from a bank. It shows whether the business earns enough money to comfortably cover its debt payments.

In simpler terms, it’s a way for the bank to see if the business can afford to pay back the loan. If the ratio is high, it means the business is making enough profit to easily handle its debts.

But if it’s low, it could indicate that the business might struggle to make loan payments, which could make the bank hesitant to lend them money.

Let’s say there’s a small bakery called “Sweet Delights” that wants to expand its operations by taking out a loan from a bank to buy new equipment.

The bank wants to make sure Sweet Delights can afford to repay the loan, so they calculate the debt coverage ratio.

Sweet Delights’ annual net income (profit) is $50,000, and they have annual loan payments of $20,000 for existing debts.

The debt coverage ratio formula is:

Debt Coverage Ratio = Net Operating Income / Total Debt Service

In this case: Net Operating Income = $50,000 (annual profit) Total Debt Service = $20,000 (annual loan payments)

So, the debt coverage ratio would be:

Debt Coverage Ratio = $50,000 / $20,000 = 2.5

This means that for every dollar of debt Sweet Delights has, they’re making $2.50 in profit. In simple terms, the higher the ratio, the better, because it shows that Sweet Delights is making enough money to comfortably cover its debt payments.

This would likely make the bank more confident in lending them the money for the new equipment.