How Private Equity Works for Executives

Equity is the primary wealth builder in private equity. Understanding how it works is essential for any executive considering a PE role.

• Understand Grant Size and Structure
  Most executives receive a percentage of equity that vests over time or based on performance.
• Know How Value Is Created
  Equity value grows through EBITDA improvement, multiple expansion, and debt paydown.
• Understand Dilution and Waterfall Mechanics
  Know your position in the capital structure and how proceeds are distributed.

Final Takeaway
Equity is where long-term value is created. Executives must understand the mechanics to evaluate offers.