Private Equity and Brands: Beyond the Horror Stories – What Really Happens to Marketing When PE Takes Over

We've all heard the nightmare stories. Private equity swoops in, strips a beloved brand for parts, slashes marketing budgets, and rides off into the sunset with a profit while the company crumbles. It's a narrative that's become almost clichéd in business circles.

But here's the thing: after working with dozens of PE-backed brands over the past decade, I've learned the reality is far more nuanced than the headlines suggest.

The Other Side of the Private Equity Story

Yes, private equity firms have a clear mandate: buy low, improve performance, sell high within 3-7 years. That timeline creates pressure. But it also creates something else – urgency around growth that many founder-led companies lack.

I've watched PE-backed brands make marketing moves that founders had been "planning to do someday" for years. Suddenly there's capital for that brand refresh, budget for that national campaign, resources to finally build out that digital infrastructure. The accountability structure forces decisions that might have languished indefinitely.

Consider brands like Drunk Elephant (acquired by Shiseido after PE backing helped scale it), or SkinnyPop (grew to $100M+ in sales under PE ownership before selling to Hershey). These aren't stories of destruction – they're stories of strategic growth capital meeting operational expertise.

When Private Equity Works for Brands (and When It Doesn't)

The difference between PE success stories and horror stories often comes down to three factors:

1. Strategic Alignment The best PE partnerships happen when investors understand the brand's DNA and category dynamics. When a consumer-focused PE firm backs a DTC brand, they bring category expertise, retail relationships, and proven scaling playbooks. When a generalist financial firm tries to apply cookie-cutter cost-cutting to a relationship-driven business? That's when things go sideways.

2. Marketing Investment Philosophy Here's where I see the real divide: PE firms that view marketing as an expense to minimize versus those who see it as a growth driver to optimize. The winners increase marketing spend strategically – they just demand better attribution, clearer ROI, and smarter media planning. (Which, honestly, every brand should be doing anyway.)

3. Timeline Realism Brand-building takes time. Performance marketing can scale quickly. The most successful PE-brand partnerships balance both, understanding that the five-year exit timeline requires building sustainable brand equity, not just goosing short-term revenue numbers.

What This Means for Marketing Leaders

If you're marketing a PE-backed brand, or considering joining one, here's what I've learned matters most:

• Expect rigor: You'll need to justify every dollar and prove performance. That's not necessarily bad – it forces strategic thinking.

• Demand resources: PE firms have capital. Don't be shy about making the case for brand-building investments alongside performance channels.

• Find the white space: This is exactly when contrarian media strategies shine. PE timelines reward finding overlooked opportunities that drive efficient growth.

• Build for the buyer: Remember, you're not just building for today's PE owner – you're building value for the next buyer. That means sustainable, scalable strategies.

The Bottom Line

Private equity isn't inherently good or bad for brands. It's a tool – powerful when used correctly, destructive when misapplied. The brands that thrive under PE ownership are the ones where there's true strategic alignment between what the brand needs and what the PE firm brings beyond just capital.

The horror stories are real. But so are the success stories. The difference usually comes down to whether everyone entered the relationship with eyes wide open, aligned incentives, and a genuine understanding of what it takes to build lasting brand value – not just financial engineering.