Majority recapitalization investment firms for founders

Lower-to-middle-market private equity (PE) firms and specialized buyout funds provide majority recapitalization financing to founders looking to cash out a large portion of their equity while keeping a "rollover" stake (typically 20% to 40%) for a second bite at the apple.umbrex.com+1

In a majority recapitalization, the PE firm typically acquires a 51% to 80% controlling stake in the business, using a mix of their own institutional capital and acquisition debt. This sends substantial cash to the founder's personal bank account while leaving the founder with a minority share in the company's future growth.peak-tech.com+1

Categories of Firms That Do Majority Recaps

• Lower-Middle-Market (LMM) Private Equity Firms: These firms specialize in smaller, founder-led or family-owned businesses (often with $2 million to $20 million+ in EBITDA) and routinely structure majority recaps to help owners transition or de-risk . Examples of dedicated LMM firms include KLH Capital, Linsalata Capital, , and hundreds of regional or industry-specific shops.umbrex.com
• Generalist and Niche Buyout PE Funds: Large institutional PE firms (such as Thoma Bravo for software, Great Hill Partners , or Summit Partners ) sometimes do majority recaps, though they usually target larger enterprise thresholds.
• Family Offices & Search Fund Backers: Private family-holding companies or independent sponsors often partner with operating executives to buy controlling stakes in profitable businesses directly from retiring or diversifying founders.

How a Majority Recap Works for a Founder

1. Valuation & Payout: The PE firm values the company (e.g., at a multiple of EBITDA) and purchases a majority percentage (e.g., 70%).soferadvisors.com
2. Rollover Equity: You "roll over" your remaining percentage (e.g., 30%) into the new corporate entity.soferadvisors.com
3. Operational Shift: You get life-changing personal liquidity immediately, diversify your net worth away from a single illiquid asset, and retain a seat on the board or an active management role alongside professionalized management.mboventures.com+1
4. The Second Exit: 3 to 7 years later, the PE firm aims to sell the entire company again at a higher valuation, giving you a second payout on your rollover equity.soferadvisors.com

If you'd like to narrow this down, let me know:

• What industry or sector is your business in?
• What is your approximate annual revenue or EBITDA?
• Are you looking to stay active in day-to-day operations or step back gradually?

A founder seeking significant personal liquidity while retaining equity in the business should focus on private equity firms that specialize in majority recapitalizations, founder-led buyouts, and control investments with management rollover equity.

In a typical majority recap, an investment firm acquires control of the company, the founder sells a substantial portion of their shares for cash at closing, and the founder retains a meaningful minority stake to participate in future growth and a second exit. The trade-off is that the founder generally gives up control to the new investor.alkalipartners.com+1

Investment firms to put on your shortlist

The firms below have documented majority recapitalizations, founder-liquidity transactions, or investment strategies relevant to this objective. The best fit depends on your industry, company size, profitability, and desired cash proceeds.

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1. KLH Capital

(Strong direct fit)

Specializes in majority recapitalizations of lower-middle-market companies, with documented transactions involving founder liquidity, management equity participation, and growth capital. Its portfolio spans specialty services, manufacturing, and distribution, including companies in Texas.www.klhcapital.com+1

Best for: established, privately held industrial, distribution, and business-services companies.

Website:klhcapital.com

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2. Main Street Capital

(Strong direct fit)

A Houston-based investment firm with a demonstrated track record of majority recapitalizations. Its transactions can combine senior secured debt and direct equity investments. In its Chamberlin Roofing transaction, the founder achieved personal liquidity while retaining significant ownership alongside management.www.mainstcapital.com+1

Best for: lower-middle-market companies with durable cash flow, particularly industrial businesses and specialty services.

Website:mainstcapital.com

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3. Periscope Equity

Acquired control of RepTrak through a majority recapitalization announced in November 2024. The firm focuses on founder-led, technology-enabled services businesses.www.lowenstein.com

Best for: B2B software, technology-enabled services, and information-services businesses.

Website:periscopeequity.com

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4. H.I.G. Capital

A broad middle-market private equity investor worth considering for control investments and recapitalizations. Its relevance will depend on the company's size, sector, and growth profile; verify appetite for your specific founder-liquidity structure.

Best for: established middle-market businesses that can support an institutional buyout.

Website:hig.com

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5. K1 Investment Management

Has completed majority recapitalizations in enterprise software, including Certify. A potential candidate if the company is a software or technology business rather than a traditional industrial or services company.www.agcpartners.com

Best for: B2B software and enterprise technology.

Website:k1im.com

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6. LLR Partners

Another firm to investigate for founder-owned growth businesses. Cypress Growth Capital's published portfolio history identifies LLR as the majority recapitalization partner for Geofore. That is evidence of relevant deal experience, though not a guarantee of current investment appetite.www.cypressgrowthcapital.com+1

Best for: growth-oriented companies, especially business and technology services.

Website:llrpartners.com

How I would prioritize them

The last distinction matters: a majority recapitalization is not necessarily the best structure if retaining control is non-negotiable. Main Street and KLH also have experience with alternative structures, but the terms and available liquidity will differ.www.mainstcapital.com+1

What I would need to narrow this to the best 5–10 firms

The most important variables are the company's EBITDA, industry, and how much of the founder's equity they want to monetize. You can share approximate figures; exact financials aren't necessary.

Company and transaction profile

Industry

Business services

Software / technology

Industrial / manufacturing / distribution

Healthcare

Consumer / other

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Annual EBITDA (approximate)

Under $3 million

$3 million–$10 million

$10 million–$25 million

$25 million–$50 million

Over $50 million

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Desired liquidity

20%–40% of my equity

40%–60% of my equity

60%–80% of my equity

Nearly all my equity

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Preferred post-transaction role

Remain CEO / operating leader

Remain involved, with a new CEO

Transition out within 1–3 years

Flexible

Company headquarters (optional)

[Input placeholder: e.g., Texas, United States] (Current value unavailable.)

[Find best-fit investment firms]

With those details, I can narrow the list to firms with the strongest evidence of comparable deals rather than simply listing large private equity funds.

For a founder seeking significant personal liquidity through a majority recapitalization, I would focus on private equity firms that specialize in founder-owned and closely held businesses, particularly those willing to acquire control while allowing the founder to retain meaningful equity and continue leading the company.

The right transaction is often called a majority recap, founder liquidity transaction, or control investment with a rollover. The investor acquires a majority stake, you receive substantial cash proceeds at closing, and you reinvest some of your proceeds into the business alongside the new sponsor.

One important distinction: a majority recap is not necessarily a full exit. If structured well, it can give you significant personal liquidity now while preserving upside in a future sale.

1. Investment firms to put on your shortlist

I would start with firms that explicitly describe majority recapitalizations, flexible control investments, or partnerships with founder-owned businesses—not simply large buyout firms that might consider one.

• 

1. Corbel Capital Partners

(Direct strategy fit)

A lower-middle-market investor offering structured debt and equity, including both minority and majority recapitalizations. Worth exploring if you want a tailored transaction rather than a conventional all-cash buyout.www.corbelcap.com

Website:corbelcap.com

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2. Mehshah Capital

(Direct strategy fit)

Explicitly lists majority recaps, buyouts, and growth investments. Focuses on critical services, including healthcare and pharmaceutical services, business and IT services, and infrastructure services. Its stated target is approximately $3M–$50M in platform EBITDA and $25M–$300M in enterprise value.mehshah.com

Website:mehshah.com

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3. FCL Capital Partners

Focuses on founder-led and family-owned companies, with stated EBITDA targets of $2M–$20M. Core sectors include business services, consumer, and manufacturing. The firm explicitly discusses majority recapitalizations and founder liquidity while retaining equity.fclcapitalpartners.com+1

Website:fclcapitalpartners.com

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4. Alkali Partners

Specifically advises on majority and minority recapitalizations, including transactions designed to provide founder liquidity without requiring a complete exit. This is an advisory firm, not the same thing as a direct capital provider; it may help you find and negotiate with suitable investors.alkalipartners.com

Website:alkalipartners.com

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5. 98 Advisors

Advises founder-owned businesses on private equity recapitalizations, including selling a controlling stake while retaining a meaningful minority position. A useful additional contact for structuring and running a competitive process.www.98advisors.com

Website:98advisors.com

The first three are the most directly aligned starting points among the firms above for a founder seeking a control investor. The last two are worth considering as transaction advisers who can help source multiple bidders.

2. Additional private equity firms with relevant experience

These firms expand the list, especially if your business falls within the lower-middle-market or traditional middle-market range.

• 

Blue Point Capital Partners

One of the strongest candidates to contact. It explicitly targets recapitalizations of closely held and family-owned businesses that provide seller liquidity while allowing continued ownership. Its stated criteria include revenue of $30M–$300M and EBITDA generally above $5M. It has documented experience with founder-owned companies.www.bluepointcapital.com+1

bluepointcapital.com

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Alterna Equity Partners

Focuses on majority acquisitions of lower-middle-market, founder-owned and family-owned companies. Particularly relevant if you want to sell control but remain invested and partner with the buyer to scale the business.www.alternaequitypartners.com

alternaequitypartners.com

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Huron Capital

A Detroit-based lower-middle-market investor with experience in control and non-control investments, equity recapitalizations, succession transactions, and management buyouts. Consider it for business services, consumer, specialty manufacturing, and healthcare-related businesses.www.prnewswire.com+1

huroncapital.com

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Incline Equity Partners

A middle-market private equity firm that lists buyouts and minority recapitalizations among its transaction types. Its stated enterprise-value range is $25M–$750M. Worth exploring for services, value-added distribution, software and technology, and specialized manufacturing, although you should confirm appetite for a founder selling a majority stake in your specific situation.inclineequity.com+1

inclineequity.com

3. How I would prioritize outreach

This is a preliminary fit assessment based on publicly described strategies, not confirmation that each firm is actively pursuing a deal of your size today.

4. What matters most in negotiating your recap

Don't evaluate offers solely on the headline valuation. Compare:

• Cash proceeds to you at closing: after debt repayment, transaction expenses, escrow and other adjustments.
• Rollover equity: your retained ownership percentage and the security in which you reinvest.
• Control and governance: board composition, CEO authority, veto rights and circumstances under which you could be removed.
• Future exit economics: how your rollover will be treated at the next sale, including preferred returns, debt, dilution and management incentive plans.
• Personal guarantees and employment terms: whether you remain exposed to company liabilities and how your role or compensation could change.

A majority recap can be attractive, but the retained equity is not equivalent to cash. Your future proceeds depend on the second exit valuation, leverage, dilution and the contractual distribution waterfall.

5. Let me narrow this to the best-fit investors

The most useful next step is to match firms to your business size, industry and liquidity target. You can fill in whatever you know below; estimates are fine.

Your recapitalization profile

Industry

Business services

Manufacturing or distribution

Software or technology

Healthcare

Consumer

Other / diversified

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Annual revenue

Under $25M

$25M–$100M

$100M–$500M

Over $500M

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Annual EBITDA

Under $5M

$5M–$15M

$15M–$30M

Over $30M

Not sure

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Estimated enterprise value

Under $50M

$50M–$150M

$150M–$500M

Over $500M

Not sure

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Desired personal liquidity at closing

$5M–$25M

$25M–$50M

$50M–$100M

$100M+

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Your intended role after closing

Stay on as CEO

Remain involved but delegate operations

Transition out over 1–3 years

Ownership preference

Sell majority; retain minority equity

Retain majority control if possible

Open to either structure

[Find my best-fit investors]

With those details, I can prioritize a more targeted list of roughly 10–15 firms and separate genuine majority-recap buyers from generalist buyout funds and M&A advisers.