Selling Your Business to Private Equity: What Arizona Owners Should Know

Private equity will often be the highest number you see. If maximum price is what you want, a PE buyer running a competitive process is frequently how you get it, and any buyer who tells you otherwise is selling you something.

But the number is not the whole offer. What you are also agreeing to — and what almost nobody explains at the letter-of-intent stage — is a change in who decides how fast the business grows. That decision is usually the one that determines whether the thing you built is still standing in five years.

We buy businesses ourselves and we hold them, so we have an obvious interest in how you read this. That is exactly why the first section is the case for selling to private equity.

The case for private equity, made honestly

A PE buyer can usually pay more than an individual buyer, and there are structural reasons why.

Cheaper capital. They are deploying committed fund capital, often alongside leverage priced better than an SBA 7(a) loan.
Cost synergies. If they already own three businesses like yours, your insurance, software and back office get absorbed into an existing platform. That is real money and it justifies a real premium.
They are buying a multiple, not just a business. A firm assembling a platform can buy your $1.5M-SDE company at 5× and have it valued at 9× once it is part of a $12M-EBITDA group. This is called multiple arbitrage and it is the entire economic logic of a roll-up. It means they can genuinely afford to outbid you.
Speed and certainty, sometimes. A well-capitalized firm with no financing contingency can close faster than a buyer waiting on an SBA lender.

If your goal is to convert your life's work into the largest possible number and then walk away entirely, a competitive process with PE buyers at the table is a rational thing to want. Say so out loud, hire a good broker, and run one.

What the fund clock actually means

A private equity fund is not a company. It is a pool of money with an expiration date.

The firm raises capital from limited partners — pensions, endowments, family offices — under an agreement that typically runs ten years. They spend roughly the first five investing it and the remainder returning it. Every business in the portfolio has to be sold, recapitalized or otherwise turned back into cash before that window closes.

This has nothing to do with whether the partners are good people. Most of them are. It means that from the day they buy your business, there is a date in the future by which it must be sold to someone else — and neither you nor they get to opt out of that.

Three consequences follow, and they are the ones that matter to a seller:

Growth is not optional. The return has to come from somewhere. If the business grows at the rate it grew under you, the fund does not clear its hurdle.
Your buyer is not the last buyer. Whoever buys it from them in year five has their own plans, and you will have no say in who that is.
The timeline is theirs. A fund that is late in its life behaves differently from one that just closed. Ask where they are in the cycle. It is a fair question and the answer tells you a great deal.

The Arizona example everyone is thinking about

In August 2026, every Salad and Go location closed.

The chain was founded in Arizona by Tony and Roushan Christofellis, and the idea was genuinely good: drive-thru salads at a price point that made fast, healthy food a normal purchase rather than a treat. It worked. People liked it. At its peak it operated well over a hundred locations.

The founders sold the concept to the private equity firm Volt Investment Holdings in 2021. They later left the business. In their own account, they did not see eye to eye with the private equity investors on business and growth strategy.

What followed is a matter of public record:

September 2025 — 41 locations closed across Houston, San Antonio, Austin and parts of North Texas.
January 2026 — the remaining Texas and Oklahoma stores closed, 25 and 7 respectively.
August 4, 2026 — parent company And Go Concepts filed for Chapter 11 bankruptcy protection in the Southern District of Texas.
August 5, 2026 — every remaining location, including all of the Arizona ones, served its last customer.

Roughly 1,300 people lost their jobs. Many of them are in Maricopa County, and some of them are probably your neighbors.

The company pointed to sustained pressure on consumer demand, past strategic growth challenges, rising costs, and a Cyclospora outbreak that damaged customer confidence. Those are all real. Fast Company asked directly whether private equity killed it, and honest people disagree about the answer.

Here is what we think is fair to take from it, and what is not.

Not fair: that private equity destroys what it buys. It plainly does not, most of the time. Plenty of PE-backed companies are better run, better capitalized and more durable than they were before. Salad and Go also faced a food-safety event that no owner of any kind would have enjoyed.

Not fair: that the founders did something wrong. They built a concept people loved, from nothing, in Arizona. Selling it was a legitimate decision and the outcome afterwards was not theirs to control. That is precisely the point.

Fair: that a growth rate set by a capital structure rather than by the business is a real risk, and that once you sell, you no longer get a vote on it. The founders disagreed with the strategy and the strategy went ahead anyway. It could not have gone otherwise. They were no longer the owners.

One honest caveat, since you would spot it eventually: Salad and Go was a venture-scale, multi-state rollup raising and deploying capital at a pace almost no local business ever sees. It is not a $4M commercial services company. The mechanics of a fund clock are the same, but the scale is not, and anyone drawing a straight line from that story to yours is overreaching.

Rollover equity and the second bite

Most PE offers include rollover equity: instead of taking all cash, you keep 10–30% of the new entity. The pitch is compelling, and it is often true — when the firm sells in five years, your retained stake gets sold too, at a higher multiple. That is the "second bite of the apple," and it can be worth more than the first.

What is less often explained is where that stake sits.

Your rollover is usually common equity. The fund's investment is usually preferred stock carrying a preferred return — meaning in a sale, they are paid their capital back, plus that accrued return, before the common sees anything. In a good outcome this hardly matters. In a mediocre one, the preferred return can absorb most of the proceeds and your second bite is worth very little. In a bankruptcy it is worth nothing at all.

Rollover equity is not a trick, and plenty of sellers have done very well from it. But it is not the same asset as cash, and it should never be valued as though it were. If someone presents a headline price of which a third is rollover, you have not been offered that price. You have been offered two-thirds of it plus a bet on someone else's strategy.

Ask these before you sign:

Is my rollover common or preferred? If common, what sits above it?
What is the preferred return, is it compounding, and is it participating?
What happens to my stake if the fund does a dividend recapitalization?
Do I have tag-along rights? Can I be dragged into a sale I do not want?
Who values the rollover, and on what basis?

Your transaction attorney will ask these. If you do not yet have one, that is the single most important thing to fix before you respond to any offer — see our guide on what a buyer actually has to do to close.

Five questions to ask any private equity buyer

Where are you in the fund's life? A firm three years into a ten-year fund has time. One at year seven does not.
Is this a platform or an add-on? A platform acquisition usually keeps its name, its systems and its management. An add-on gets absorbed — your brand, your back office and often your leadership team disappear into the parent.
What happened to the last three businesses you bought in this sector? Ask for the sellers' phone numbers. A good firm will hand them over without hesitating.
What is the growth plan, specifically, and what does it require of the business? "We will invest in growth" is not an answer. New locations funded by debt is an answer. Doubling the sales team is an answer.
Who buys it from you, and when? They have modeled this. Ask them to tell you.

When private equity is the right answer

There are plenty of cases, and pretending otherwise would be dishonest:

You want maximum price and a clean exit. PE will usually beat an individual buyer, and if you are leaving entirely, the five-year plan is not your problem.
Your business needs capital you cannot or will not provide. If growth requires $3M of equipment and you are 64, a well-capitalized owner is genuinely better for the business than you are.
You want to keep running it with real backing. Some founders love the platform model — they stay as CEO, get institutional support, and take a second bite. When it works, it works well.
Your industry is consolidating anyway. In some sectors, being the last independent operator is the risky position, not the safe one.

Where we sit

We are not a fund. There are no limited partners, no ten-year agreement, and no date by which your business must be sold to somebody else. We buy a small number of Arizona businesses with our own capital and SBA financing, and we operate them.

The honest trade is this: in a full auction against a fund with committed capital or a strategic buyer with cost synergies, we may well be outbid — and we will tell you that early rather than waste your quarter. What we will not do is anchor low, retrade you in diligence, or let the price drift down between the letter of intent and the closing table. If a competitive process is what you want, run one — and if that is your conclusion, we can introduce you to brokers we have worked with before.

What we offer instead is that the growth rate stays sane, the name stays on the building, and nobody is contractually obliged to sell your company to a stranger in year five.

If that trade appeals to you, start a conversation. No NDA required, and you do not have to name your company on the first call.

You may also want to read who buys small businesses, which compares all five buyer types, and what happens to your employees when you sell.