Building a lovable product can take years. But when a company is acquired by private equity, investors probably want to see results much sooner. | Photo by Jodi B Photography
Private equity owns your roadmap — should you stay?
We are hiring a VP of Product Management and UX at Aha! right now. So I am reading a lot of applications and talking with accomplished product leaders. Every late-stage candidate meets with me before joining the team — I enjoy these conversations, and they are essential to being aligned with new folks. For many, the search is about more than a new role. They work for private equity-backed companies and are looking for an escape hatch.
A recent candidate told me: "I'm specifically looking outside of private equity ownership." And maybe surprisingly (or not), they are not the only one who shared this.
I understand their motivations. Their last role ended when the company merged with a competitor. They lost their job as a result of a business decision they had no control over. After experiencing that kind of upheaval firsthand, they are understandably reluctant to join another company and go through something similar.
Another person shared that they are "looking to move on from a PE-owned company to an independent, self-funded company." Why is that? I think it is because people want to invest in their teams and build products customers love. They know that earning customers' trust requires doing what you say you will, and that takes time. You release functionality, customers use it, and you learn what needs to improve. As their needs change, you continue improving the product and expanding what they can accomplish with it. Customers find more reasons to use the product, which helps the business grow.
It is incredibly rewarding to stay with a company for years and see the results of what you have helped build.
I know this from my own experience at Aha! Some of our customers have been with us for more than a decade. I remember conversations we had when our software was much simpler and the ideas we hoped to pursue were still far off. Today, those same customers can bring customer research, roadmap planning, and AI app-building together in one platform. I am proud to see our original vision realized in ways that have had a lasting impact on individuals, teams, and the industry.
Certainly, product leaders can find that same satisfaction at private equity-backed companies. It is also true that many people do not have the option to overindex on the ownership structure of the company they work at (or are applying to) because their primary objective is to be gainfully employed.
No matter your situation, the reality is that a company's ownership structure has a huge impact on its priorities. Consider this for product development. The product team might see years of work ahead, while the owners have limited partners who are expecting a financial return within a shorter time. Most private equity funds have a finite lifespan, so the firms need to sell their investments and return capital and profits to their limited partners within that period. Their performance is often measured by internal rate of return (IRR). This metric accounts for when cash is invested and returned, and achieving the same return sooner generally produces a higher IRR.
Private equity is not inherently at odds with building great software. But the people involved might be working toward different outcomes.
Here is how those different objectives can affect the product work that inspires you:
Pride in building is less valued
You want to be proud of the product you helped build. That means making decisions you believe will benefit customers and having the opportunity to see whether you were right. Many private equity decision makers come from investment banking or finance rather than product-building. Their expertise is in evaluating businesses and improving financial returns, so that is often the lens they bring when determining which product investments to support. They might recognize the commercial value of great software without sharing a builder's commitment to the craft: working through difficult design decisions, refining the details, and making something exceptional for customers. It can be hard to sustain pride in your work when the improvements that matter to you are valued only for their measurable financial contribution.
The time horizon is limited
You may not get to finish what you started. Some product improvements take years to get right, particularly when you are making significant changes to existing software. You want to create lasting value for customers by solving more of their problems and improving the software they depend on. But the owners could be preparing the company for sale before those investments have a chance to deliver results. Work that could make the product more valuable to customers over time might lose funding to projects that make the business more attractive to a buyer today.
People are not always the priority
A successful company depends on treating employees and customers well. Talented people need to believe in the mission, and customers need to trust the company to serve them. Those relationships develop over years of working together. Private equity owners evaluate the business through financial measures such as revenue growth, profit margins, and cash flow because those results shape the return they can deliver to their limited partners. Investing in people can improve those results. But when the two compete, financial targets could take precedence over an individual's opportunity to grow, the stability of their role, or the resources they need to do good work. A decision that improves the company's financial performance can still come at a real cost to the people who helped build it.
Private equity firms have a responsibility to their investors first. That is the business they are in — it should not surprise anyone when their decisions reflect that.
There is nothing wrong with private equity ownership. It is a core part of the business ecosystem. But working at a private equity-backed company means accepting the constraints that come with that ownership.
Whatever company you work for, its owners and what they are trying to achieve materially influence how the business operates, which investments it makes, and what it values. Look objectively at how those priorities show up in decisions about products, customers, and people. Then, decide whether they align with what you care about most and the work you want to do.
Aha! is bootstrapped, profitable, and fully remote. We try to put people first. And we are hiring a VP of PM/UX right now. If you are interested, please read the job description carefully and apply.
