Does private equity ownership degrade a company's product innovation?

Eléonore Crespo · May 9, 2025

Pigment has no real competition today because incumbents in the category are private-equity owned and 15-20+ years old, and have lost their pace of innovation and customer obsession

PE ownership and age have slowed innovation at competitors, which is why Pigment succeeded so early in both the US and Europe

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Harry Stebbings · Sep 12, 2025

Product innovation instantly degrades once a company is bought by private equity.

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Jason Lemkin · May 27, 2024 · hedged

PE-owned SaaS companies that stop innovating can still hold substantial enterprise value and have a decade to run, provided they grow in the teens and hit the rule of 40

Public markets still reward rule-of-40 businesses; 15% growth plus ~35% margins compounds to a lot even without new product

63:58 Pe owned companies retain substantial value without innovation if they clear rule of 40

David Frankel · Oct 14, 2024

Private equity firms can be very valuable partners in seed-stage portfolio companies, contrary to his prior belief that PE was the enemy of the seed stage.

PE firms in two of his vertical SaaS companies brought rigor and financial discipline and gave help that benefited the entire cap table.

77:19 Pe ownership brings valuable discipline and help to seed stage companies