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- Business Insider
- Companies face heat for taking PE money. These days, the alternatives aren't great.
Companies face heat for taking PE money. These days, the alternatives aren't great.

Dolly Faibyshev for BI
- This post originally appeared in the Business Insider Today newsletter.
- You can sign up for Business Insider's daily newsletter here.
A horror story in eight words: Private equity just invested in my favorite BLANK.
"PE ruins everything" is a well-worn trope, but it's not unearned.
Private-equity investors have a history of stripping companies for parts and saddling them with debt, leaving customers wondering what happened to the product they once loved.
So it wasn't surprising that some fans of Los Tacos No. 1, an NYC Tijuana-style taco chain, feared a new PE investment would ultimately ruin things.
Christian Pineda, the chain's CEO and cofounder, told BI's Martina Nacach Cowan Ros that he's determined not to let that happen, and that "private equity is not always bad."
Ironically, the visceral reaction was exactly why TSG Consumer, which also backs Crumbl and Dutch Bros Coffee, was interested in the taco joint in the first place. TSG executive Colin Welch told Martina that Los Tacos No. 1 has a "cultlike following," and the company needs to "show those skeptics that it's going to be exactly the same."
Before you roll your eyes, there's a recent example of a largely positive PE-backed story in the restaurant industry. Blackstone spent two years turning founder-run Jersey Mike's into an IPO-ready company.
While the PE firm took big steps to professionalize the 51-year-old sandwich shop, it didn't touch portion sizes or suppliers. And Blackstone also established a shared ownership plan allowing Jersey Mike's employees to cash in on this summer's IPO.
It hasn't all been a fairy tale. The company opened below its IPO price of $23 — never a good sign — and is currently trading around $18 per share.
You might not like private equity, but it could be your only option.
Los Tacos No. 1 spent 13 years growing to 10 spots across Manhattan and an additional sister location, Los Mariscos. Further expansion in such an expensive city is difficult enough. Add in the rising cost of goods like beef, limes, and avocados, and growth plans become even harder to achieve.
There are other ways to raise capital outside PE, but they aren't pretty these days.
The lending market remains a disaster. The possibility of at least one more rate hike before the end of the year means borrowing costs aren't likely to drop anytime soon.
And the public market isn't too inviting. The heavy focus on AI means anyone who isn't a major player in that space risks being ignored by investors. Even the biggest names in AI, like OpenAI, aren't rushing to go public.
This isn't about defending private equity. (God knows it has enough money to do that itself.) It's just showing the economic and market environments have limited a lot of companies' choices.
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Protestos pela habitação não páram e entram no 10º dia

Katie Zacharia and the real problem with workers embellishing their credentials

Samuel Corum/Pool/FTWP
- This post originally appeared in the BI Today newsletter.
- You can sign up for Business Insider's daily newsletter here.
The credibility concern
When questions began swirling about new (and now former) White House press secretary Katie Zacharia's legal credentials, a colleague asked the obvious question: Why should anyone care?
She was hired to be President Donald Trump's spokesperson, not his lawyer. Does it really matter if she overstated her qualifications?
It does.
She was let go on Friday, five days after starting the job. That's half the time Anthony Scaramucci infamously lasted as White House communications director during Trump's first term.
Zacharia was widely panned for her performance during her first (and final) press briefing on Monday, as well as for misrepresenting herself as a lawyer.
In workplaces, it turns out, bending the truth about one's background is not only problematic, but more common than you might think. And it can carry real consequences. BI's Sarah Needleman spoke with recruiters and found research suggesting that résumé inflation is very much a thing.
A recent survey found 37% of respondents had included inaccurate information on a résumé, according to Novorésumé, an online résumé-building service. Nearly 7% said they claimed a degree, certification, or credential they didn't actually have.
The trouble, of course, is that a small embellishment can raise much bigger questions.
Brian Fink, a managing partner at tech recruiting firm The ReWork Group, told Sarah he rescinded an offer to someone after a background check couldn't verify certain information on the candidate's résumé and LinkedIn profile.
"If you're willing to lie about your education," Fink said, "what else are you willing to lie about?"
Corporate America is full of cautionary tales. Over the years, executives at Samsonite, Walmart, and Yahoo, among others, misrepresented their backgrounds and ultimately lost their jobs as a result.
Credentials matter. They are a promise of basic trust. Once that trust is called into question, it's really hard to win it back.
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