“A good man leaves an inheritance to his children’s children.”
Proverbs 13:22
Dear Kingdom Builders,
One Christian CEO said that after watching good companies, and their people, get pulled apart after private equity acquisitions.
Another owner spent 32 years building his company. He and his wife are praying about succession: “We don’t want that to end with an exit to traditional PE.”
For years, Christian founders have faced an uncomfortable choice. Take the best offer, or protect the culture.
BUT a group of investors has started asking a different question: What if you didn’t have to choose?
And there’s hardly been a time like now.
The $5 Trillion Handoff
McKinsey estimates roughly 6 million U.S. small and midsize businesses will face ownership transitions by 2035.
More than 1 million could be sold, representing as much as $5 trillion in enterprise value.
Among them are companies owned by Christians who have spent decades building cultures shaped by their faith.
For those founders who have intentionally built faith-aligned companies, a sale naturally leads to the question: What will the next owner decide when I’m no longer the one making the decisions?
Culture Is the Asset
Best Christian Workplaces found 23.8% of C12 member companies qualified as “flourishing” workplaces. Among the other for-profit companies, it was 9.1%.
That’s more than 2.5x.
And Gallup finds the most engaged teams are 23% more profitable than the least engaged.
So the culture these founders are most afraid of losing may be the very thing that makes their business worth buying.
Why do so many founders still feel they have to choose between valuation and their values?
The Founder’s Dilemma
Private equity can be a great buyer. But the model runs on a clock.
The average PE hold is now about 6.6 years. Investors need liquidity. The PE firm’s obligations are ultimately to their investors. So even a great business is usually being owned with another transaction somewhere in its future.
An owner’s 32-year legacy may be entering a 6.6-year investment cycle built around a very different set of incentives.
That leaves Christian owners weighing the financial value of the business against the faith values that built it.
Value vs. AND Values
However, there is now a growing ecosystem of Christian investment firms that want both the value and the values.
These equity partners and operators bring capital and operating discipline with a Christian mindset. They are seeking to preserve the culture that founders spent decades creating.
They are taking a lot of different approaches. For example:
Sovereign’s Capital partners with owners in what it calls “forward stewardship,” with the flexibility to extend holds.
STAPLE Investments uses evergreen capital to buy Christian-owned businesses for long-term ownership.
Chatham Equity Partners is a faith-driven holding company looking for businesses run with Biblical values at the core.
And search funds like Mosaic Genesis back entrepreneurs who acquire an established business and lead it themselves.
And yes, it’s happening now.
For example, this spring, STAPLE partnered with Corporate Travel Services, a family-owned company founded in 1965. Its president said STAPLE “recognizes the value of the culture we’ve built over decades.”
There are many more firms and a growing group of Christian individuals seeking to acquire companies for their values.
Together, they may be helping build a more robust Christian ownership ecosystem.
Have a blessed week.
Matt
Christian Investment Access
Private market deals aligned with Christian values.
Explore opportunities in real estate, venture capital, and more for qualified investors, advisors, and institutions.
She Left Corporate Money and Power to Help Christian Business Owners Thrive
Krystal Parker, founder of the U.S. Christian Chamber of Commerce and author of The Christian CEO, discusses what it really looks like to follow Christ when business decisions get costly:
Current trends and challenges in the Christian economy
How ambition and success can quietly become part of your identity
What Christian leaders can do when doing the right thing costs money, opportunity, or approval
ICYMI: Christian Business & Financial News
A Washington pastor has been charged with wire fraud and money laundering in an alleged $13 million investment scheme that prosecutors say targeted members of his own congregation, including some he told God had chosen to invest.
Chick-fil-A generated $23.9 billion in U.S. sales last year. CEO Andrew Cathy confirmed he's never calculated how much revenue the policy costs because changing it isn't under consideration. He says private, family ownership gives Chick-fil-A the freedom to prioritize a guaranteed day off for employees over maximizing every available sales dollar.
30-Second Financial Terms and Strategies
Search Fund
A search fund is an investment model where an entrepreneur raises capital to find, acquire, and then operate an existing private business.
What it is: Instead of starting a company from scratch, the entrepreneur searches for an established business, usually from a retiring or transitioning owner, and raises investor capital to acquire it.
What it looks like: A searcher may spend a year or two finding a profitable founder-owned company, buy it with backing from a small group of investors, then step in as CEO and run the business.
Why it matters: Search funds can create a direct succession path for owners who care deeply about who leads the company next. For Christian founders, they can also create opportunities to hand the business to an operator who shares their values rather than simply selling to a financial buyer.
DISCLAIMER: This material is provided for informational and educational purposes only and does not constitute investment, legal, tax, or other professional advice, nor is it an offer or solicitation to purchase or sell any security. “ChristianAlts” is a media publication operated by HoneyHive Capital Partners LLC. HoneyHive Capital Partners LLC is not a broker-dealer, investment adviser, or funding portal and does not offer or sell securities. The author is a registered representative and investment adviser representative operating through separate, regulated entities, including Excelitrax LLC (d.b.a. HoneyHive Capital), which conducts investment banking and securities-related activities under the supervision of Finalis Securities LLC, member FINRA/SIPC. This publication is not issued on behalf of, or supervised by, Finalis Securities LLC or any affiliated broker-dealer. Any securities-related services or transactions are conducted only through the appropriate regulated entities and are offered solely by means of formal offering documents, including, where applicable, a confidential offering memorandum, and in accordance with federal and state securities laws. The views expressed herein are solely those of the author and are based on internal research, opinions, and publicly available information that has not been independently verified. No representation or warranty is made as to the accuracy or completeness of the information. Past performance is not indicative of future results. Any forward-looking statements are subject to risks, uncertainties, and assumptions that may cause actual results to differ materially.
