Operating partner

Definition

Someone who runs the business with you, or for you, after close.

Why It Matters

The word covers two arrangements a buyer meets under one name, and confusing them is expensive. An investor's operating partner is a shared resource: an experienced operator the fund puts in front of several companies, useful for a specific problem and never accountable for your week. A partner in your own deal is the opposite, taking equity and a seat, and is worth it when the business needs an owner in a place or a discipline you cannot cover. Ask which one is on offer before you value it, because the first is help and the second is a co-owner.

In numbers: A fund offering an operating partner is offering perhaps a day a month across its portfolio; a partner taking 20% of the equity to run operations is giving up a salary elsewhere to be there daily.