A short YouTube commentary by Adam Sand arguing that aligning incentives is a more powerful and important tool in private equity deals than relying solely on legal contracts. The speaker emphasizes active ownership at the board level, partnering with trusted platform operators rather than attempting to run daily operations, and seeking shared goals for successful outcomes.
Aligning incentives is a very, very powerful motivator. A lot of people think private equity firms have incredibly well paid attorneys that draft up the legal documents for their deals. Having align incentives they view as much more important than having contracts. Their key criteria is like they're investors, they evaluate deals, they execute deals. They'll be pretty active from a board level and insight. I mean, it's active ownership. Like they're involved, but they're not planning on coming in and running the business on a daily bas. They don't have the experience to do it. You don't want to see these guys attempt a roofing inspection. I mean, they have plenty of skill sets, but it's not running roofing companies. They're looking to partner with investors that they trust and have confidence and faith in to lead these platforms. And they want aligned incentives that we're all shooting for the same ultimate goal of a successful outcome. In the end.
