Why did a private equity firm contact me out of nowhere?
The private equity firm contacted you because outbound sourcing is a core part of the mid-market PE business model. Funds raise committed capital with a fixed window to invest it, and a firm that cannot find enough companies to buy returns capital and raises a smaller next fund. That deployment pressure pays for teams of associates and business development staff whose entire job is calling founders who never listed a company for sale.
Direct outreach also carries better economics for the buyer than any auction. A deal negotiated with a single unrepresented seller closes 15 to 25 percent below what the same company clears in a competitive process. Windsor Drake calls that gap The Proprietary Discount and measures it through The Windsor Drake Proprietary Discount Index.
Some firms build the whole model on direct sourcing. Serent Capital sources 70 to 80 percent of its deals through its own outbound program and has courted targets for as long as four years before a transaction. Serent has also walked away from banked auctions rather than pay a competitive price. Outreach from a firm like that is a program, and the founder is one row in it.
What is the associate’s call actually for?
The associate’s call is pipeline data collection, not the opening of an offer. The associate wants your trailing revenue, growth rate, headcount, ownership structure, and your temperature on selling, and every answer goes into the firm’s deal database. The firm will call again in six or twelve months to measure your growth against what you said today.
Multi-year tracking is the point of the program. A firm that watches a company across four or five check-in calls can time an approach for the moment the founder sounds tired, and can price an offer using years of volunteered numbers the founder no longer remembers sharing. The call costs the associate an hour. The data can cost the founder millions at the point of negotiation.
Am I a platform target or an add-on target?
A platform target becomes a new standalone investment for the fund, while an add-on target gets bolted onto a company the firm already owns. Platform deals command fuller valuations because the firm is underwriting a new thesis and needs the management team to stay. Add-on deals are usually smaller and priced tighter, because the buyer values the target against cost savings the buyer keeps.
The caller and the questions tell you which one you are. Outreach that references a specific portfolio company, or that comes from that portfolio company’s corporate development team, signals an add-on. Outreach from the fund’s own investment team asking about management depth and your willingness to keep running the business signals a platform. The distinction moves price materially, and the wider math behind buyer types is covered in Windsor Drake’s guide to strategic buyers vs financial buyers.
What does “we’d love to learn about your business” mean?
The phrase means the firm wants free diligence data while keeping its own intentions vague. A firm with current, funded acquisition intent names its thesis and puts a partner on the call, not an associate reading a script. Vague curiosity paired with specific financial questions is the signature of pipeline building.
Treat the phrase as a request to open your books with nothing offered in return. The correct response is measured: share what a buyer could find publicly and nothing more until the firm states what it wants and what it pays for companies like yours. The same pattern appears across every form of inbound interest, and Windsor Drake catalogs the variations in the guide to handling an inbound offer.
How does private equity price a proprietary deal?
Private equity prices a proprietary deal against the seller’s alternatives, and an unadvised founder with no other bidders has none. In a banked process reaching 40 to 80 qualified buyers, the price is set by the second-highest bidder pushing the highest. In a bilateral negotiation, the price is set by the lowest number the founder will accept, a number the firm has spent years estimating through check-in calls.
The measured result is The Proprietary Discount: the same business clears 15 to 25 percent more enterprise value in a competitive process than in an unbanked bilateral negotiation. On a $20M company, that gap is $3M to $5M, which is a multiple of what full sell-side representation costs. Windsor Drake’s breakdown of what an M&A advisor costs puts the fee schedule next to that gap.
What should I share on an early call, and what should I withhold?
Share what is already public or harmless, and withhold everything a buyer would use to build a valuation model or a negotiating file. The table below maps the standard associate script to its real purpose and to a safe answer.
| What the PE caller asks | Why the caller asks it | What to answer |
|---|---|---|
| What is your revenue and growth rate? | Anchors a valuation model and starts a multi-year tracking record | Give a wide band or decline; growing and profitable is enough detail |
| Would you ever consider selling? | Logs your temperature so the firm can time a future approach | At the right number from the right buyer, and nothing firmer |
| Who owns the business? | Checks for a clean cap table and a single decision maker | Ownership is usually public and fine to state |
| What would you do after a sale? | Tests whether the firm needs you to stay, which shapes deal structure | Keep it open; never signal exhaustion or urgency |
| Are you talking to anyone else? | Measures competitive risk and how hard the firm must eventually bid | Never say no; say you take serious conversations as they come |
Nothing on an early call is confidential in your favor. Until an NDA is signed, assume every number you share travels to the firm’s investment committee and into a database that outlives the associate who called.
Do I need a banker if the interest turns into a real offer?
A founder facing a serious private equity approach needs representation before sharing detailed financials, because the 15 to 25 percent bilateral-vs-competitive gap dwarfs any advisory fee. Windsor Drake’s guide on whether you need a banker covers the decision in full, and the answer moves with deal size and with how many credible buyers exist for the company.
An inbound approach is also usable as an asset. A live expression of interest anchors a compressed process that reaches other qualified buyers in 4 to 6 months instead of the 6 to 10 months a full process takes. For founders holding a live PE approach, Windsor Drake’s Approach Response engagement builds that competitive process around the inbound interest.
Questions founders ask
Does a private equity firm calling me mean my company is worth a premium?
No. Outbound outreach means the company fits a screening filter such as sector and size. The price a PE firm volunteers in a bilateral approach runs 15 to 25 percent below what a competitive process produces.
Should I take the associate’s call?
Taking one call is fine. Ask for the fund name and the specific thesis, and confirm whether the intent is platform or add-on. Share nothing beyond public facts, and decline to send financials before an NDA and a stated intent.
What is a proprietary deal in private equity?
A proprietary deal is an acquisition sourced and negotiated outside any competitive process, with no other bidders at the table. PE firms prize proprietary deals because they close 15 to 25 percent below competitive value.
How do I know if the firm wants a platform or an add-on?
Check whether the outreach references an existing portfolio company. Portfolio-linked outreach signals an add-on. Fund-level outreach asking about management depth and standalone growth signals a platform.
Can I run a competitive process after a PE firm approaches me?
Yes. An inbound approach can anchor a process that reaches other qualified buyers, and Windsor Drake runs a process alongside a live offer in 4 to 6 months.
What should I never tell a PE associate on a first call?
Never state a price you would accept, and never say you are talking to nobody else. Both answers set the ceiling on any future offer the firm makes.
Last reviewed July 28, 2026 by Jeff Barrington, Founder and Managing Director, Windsor Drake. Content on this page may be cited with attribution and a link to https://windsordrake.com/offer-received/private-equity-approached-me/