The Private Equity Playbook Wall Street Won't Teach (Podcast)
Sequoya Borgman joined Danny Gould on The Investing Secrets Podcast to discuss his journey from private equity partner to founder of Borgman Capital, a lower-middle-market private equity firm that has acquired more than 20 family-owned and founder-led businesses.
The conversation offers insights on:
From 1-of-1,000 Partners to His Own Private Equity Firm [00:00]
The First Deal That Collapsed — and What It Taught Him [02:56]
What Borgman Capital Buys: Family-Owned Manufacturing & Food Companies [05:43]
Value Creation Through People, Management & Operating Partners [09:24]
What Actually Drives the Multiple You Pay for a Business [15:44]
One Final Investing Secret [33:36]
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This transcript has been edited for clarity and readability. Please refer to the original podcast recording for the complete conversation.
From 1-of-1,000 Partners to His Own PE Firm
Welcome to the show. Today, we welcome Sequoya Borgman to the program. Sequoya’s path to running his own private equity firm was built over two decades inside the industry. A CPA by training, he spent years at some of the top PE firms in the country, working on M&A and transactions alongside the best in the business.
He eventually made partner, but being one of a thousand partners meant he couldn’t drive the direction of the company. So, in 2017, he decided to walk away from his W-2 and start anew.
Today, Sequoya is the founder of Borgman Capital, a lower middle-market private equity firm that has acquired more than 20 businesses, buying older family-owned and founder-led companies in industrial manufacturing and food, where his team is often the first institutional investor.
Along the way, he’s also built an industrial sale-leaseback real estate arm and launched Pass the Hat, a platform giving accredited investors direct access to his deals.
We kick off the episode with Sequoya’s origin story and how walking away from a partnership—and surviving the first deal that collapsed—set the foundation for everything that followed. Later, we dive into the real mechanics of the business, how he structures leveraged buyouts, what actually drives the multiple you pay for a company, and the value-creation levers most people misunderstand about private equity.
To wrap up the episode, Sequoya shares where he sees the biggest opportunities heading into the second half of 2026: the wave of aging Baby Boomer owners who need to sell, why the best-performing funds in history were born in down markets, and the one investing secret he’s learned to live by.
So, if you’re looking to understand private equity, alternative investments, and how sophisticated investors buy and build real businesses for outsized, tax-efficient returns, this episode delivers a rare practical look from someone who has been actively sourcing, structuring and closing deals at the highest level for nearly a decade.
So, without further ado, let’s welcome Sequoya Borgman.
Danny Gould: Welcome to the Investing Secrets Podcast. Sequoya, welcome to the vault.
Sequoya Borgman: Yeah, thanks for having me.
Why He Walked Away From the Partnership in 2017
Danny: I’m excited to chat a little bit and learn more about your PE strategy that you’ve been deploying now since 2017. Is that correct? You’ve been working on this for about a decade now.
Sequoya: Yeah, we’ve been investing for, like you said, almost a decade at this point.
Danny: That’s incredible. Before that, you were at a couple of different accounting firms. Talk to me about the “aha” moment where you thought, “You know what? I think I’m going to branch off and start doing my own deals.”
Sequoya: I started out at some of the big PE firms. I’m a CPA by training, which was great training. I worked on a lot of transactions, M&A and with a lot of the best private equity firms out there.
After doing that for about two decades, I decided I wanted to do something a little bit more entrepreneurial.
I was a partner at that point, but being a partner at a big firm, you still have a thousand other partners, so you’re not able to drive the direction. I was just looking to do something, like I said, on my own. I left and launched the firm in 2017 and haven’t looked back since.
Danny: I wish I’d done it earlier in my career. What was the first deal that you saw coming into this new venture where you thought, “Wow, this could be a big one for us”? What was that first deal?
The First Deal That Collapsed—and What It Taught Him
Sequoya: The first deal—actually, any entrepreneur who starts something new thinks about it for years before they actually pull the trigger. I had everything lined up and had been looking for the first acquisition for a couple of years.
I finally got it under LOI and was ready to hit the ground running. So I left my firm and launched this firm.
The funny story is that the first deal ended up falling apart. Deals don’t always close, and I learned that the hard way. That first business owner just decided not to sell. He decided to sell to his son instead of to me.
That was a wide shock to the system when you’re out on your own. Fortunately, I found another business owner who wanted to sell soon after that and closed that probably six months after launching the firm.
That was the first acquisition. It was a material-handling business here in the Midwest, and we’ve bought 20-some businesses since then. We also launched an industrial sale-leaseback investment group during that time.
Danny: Yeah, I saw you’re also doing a little bit of commercial real estate as well, so I’d love to chat about that, too. Coming back to that, though, the first deals that you did—were these all self-funded? Were you raising money for them?
Sequoya: The first deals were raising money, but it was really one of those things we call “Pass the Hat” now. It was my friends and people I knew through the industry.
I had a lot of connections just from working in the private equity industry for a long time, so that helped. For the first deal, I think there were 26 LPs in that deal. We did have one anchor investor who wrote the largest check, but I really talked to my network and lined up the money for that.
Since then, all our deals have involved putting together a special-purpose entity to acquire the company. We do it on a deal-by-deal basis, and we have different groups of LPs. We’ve got over 500 LPs at this point who have invested with us over the last 10 years.
What He Buys: Family-Owned Manufacturing & Food
Danny: So, are these all the same type of business, or are you investing across a variety of different business types?
Sequoya: We focus on the lower end of the middle market, primarily family businesses or founder businesses. We’re the first institutional investor in those businesses.
The main industries are older industrial manufacturing, food businesses and those types of value investments. We don’t invest in technology, healthcare or any of the fast-growing businesses.
We’re focused on older-industry, second- and third-generation businesses where they just don’t have a successor. That’s really our focus.
Danny: Got it. This sounds reminiscent of—and I’m sure you’ve heard of—the Cody Sanchez strategy, where you buy these small mom-and-pop businesses. But based on your target size, like $100 million to $200 million in revenue and about $20 million or under in EBITDA, it sounds like maybe a little bit larger than just a mom-and-pop laundromat.
Sequoya: Yeah, they’re no longer mom-and-pops by the time we invest. Some of the businesses have been around 70 or 100 years. They’ve grown pretty sizable.
A lot of these nice, stable businesses that get through the cycles have grown to a good size by the time the family generation that doesn’t really want to run the business—or maybe isn’t capable of running that business—takes over.
That’s when we get involved. The founder or owner wants some type of liquidity event, but we’re not investing in small businesses. There’s a lot of risk around those smaller businesses, and most of those businesses are bought by individuals, search funds or somebody using SBA financing.
We’re above those businesses, but really below the true middle market—the $200 million-plus size businesses.
The Aging-Owner Wave Driving His Deal Flow
Danny: Speaking of SBA financing, I’m assuming you’re not getting SBA for these deals, right? How are you typically leveraging or financing? I’m assuming it’s not 100% equity; there’s some debt on it as well.
Sequoya: Yeah, it’s called leveraged buyouts for a reason. A lot of the return comes from using leverage. It’s like buying stocks with a margin account. You really boost your return if you’re able to.
We primarily use regional banks, sometimes national banks, to finance the senior leverage. Then we’ll do a strip of mezzanine or subordinate debt or seller note, and the rest is equity. That’s the typical structure.
Sometimes there’s an earnout in the structure, but I’d say maybe half the purchase price is senior debt and the other half is some form of equity or subordinated debt.
Danny: How did you develop the skill set necessary to take a variety of different businesses across different sectors and put in the right management team? This seems like a very sophisticated type of skill set. I’m just wondering how one develops that.
Sequoya: Like I said, my background is finance and accounting, so I’m a numbers guy. I’m more focused on the cash flow of the business, but I’ve got a team under me.
We’ve got 15 people and five offices around the country. We bring in the right necessary resources for each company and each industry. We’ll bring in an outside board of industry experts who really know that industry or that business inside and out, and they’ll add a lot of guidance.
Then we’ll bring in consultants or operating partners as needed if there are certain things or value-creation initiatives that we need to do for that particular business.
There’s no one person—nobody in private equity knows everything about every company that they invest in. They just need to find the right resources and bring them to bear when they invest in that business.
Value Creation: People, Management & Operating Partners
Danny: When you’re evaluating a business, what are the key ingredients that are required? When you look at something, what makes you think, “These are the things that we need to see in order to be confident that this is going to be a success for us”?
Sequoya: Every business, especially smaller lower-middle-market businesses, is all about the people. You want to invest with people and management teams that you trust—management teams that are aligned with your interests.
We set aside a chunk of the equity for the management teams to earn. So, if they do well for the investment, they do really well for themselves personally.
That aligns their interests, our interests and the investors’ or LPs’ interests.
That’s the main thing. You don’t want to invest with people where you’re not aligned, you’re not seeing eye to eye on the vision for the business, or you just don’t trust the individuals to do the right thing for that business.
Danny: You mentioned family-owned or family-run businesses, and I find this very interesting because I’ve actually been a customer of a couple of different companies that have been acquired and were family-run.
Then a PE firm came in, and as a customer, my experience was normally negative with the changing of the guard. How do you mitigate or control for making sure that the customer experience stays unperturbed—or that it improves?
Sequoya: Usually, those aren’t the best investments. If the customers or employees have a negative experience, that’s not what normal private equity wants. Private equity wants to improve that business.
I’d say that’s the exception. But we can tell, too. One of the accounting firms we work with got invested in by private equity a year or so ago. We noticed the terms on their engagements change because private equity, of course, is focused on cash flow and improving margins, bill rates and all that kind of stuff that a well-run business should be doing.
So, if sometimes you notice those things, maybe if it wasn’t such a well-run business prior to private equity coming in, you’ll notice that they’re going to focus on all the things that generate the highest amount of EBITDA and cash flow possible.
As a customer, that could be something that you experience. They also do a lot of things that family businesses really don’t want to do. They do customer rationalization, SKU rationalization, supplier rationalization. Maybe they do call some of their customers that aren’t strategic or aren’t profitable.
That customer in particular probably has a bad experience through that, but maybe that is the right thing for that business. Businesses are there to generate a profit.
A lot of family businesses don’t run them that way. They run them as a family or lifestyle business or just to pay their employees. Private equity is 100% focused on getting the highest return possible for its investors.
That’s really our fiduciary duty—to do what’s in the best interest of our investors. Sometimes that entails making tough decisions that impact employees or customers.
Danny: There are always two ways to increase value, right? Increase revenue or decrease expenses. When you look at a typical company that you’re going to acquire, what are the three most common levers that you can pull to increase revenue or decrease expenses?
Sequoya: Those are the easy ones. There are a lot of levers that you can use to really get a nice return in private equity.
Number one is just paying down the company’s debt over a period of time. If you buy a company with 50% debt and 50% equity, and you pay that debt down over five years, you’ve doubled your equity. That’s a two-times return just from doing that.
You don’t have to grow the revenue or cut costs in order to get a nice return. You just need to maintain that cash flow.
Or you can improve productivity and improve margins. There are a lot of things you can do without actually cutting costs out of that business.
I think it’s a misnomer that people think private equity invests in the business and then just lets everybody go and slashes costs. Most private equity really wants to grow the business, put more capital into that business, reinvest in that business and get it to the next level.
A lot of times, that entails adding costs. Usually, when we invest in a business, we have to improve their benefits and improve pay. A lot of that type of stuff actually costs us money.
When you invest in people, that’s how the businesses start to grow. People see that you care about them, and you set aside some of the equity so that they’re owners in those businesses. Those are the best investments.
I think the cost-cutting lever is probably the lever that’s pulled the least.
Professionalizing the business, getting new systems in place, implementing a new ERP system and documenting a lot of their processes and procedures—all of that reduces the risk in that business and increases the value.
So, you can increase the value of that business from a multiple standpoint without cutting costs or sometimes even growing revenue.
Growing revenue is hard, especially if it’s in a competitive space. You can still make a good investment in a business without growing it.
What Actually Drives the Multiple You Pay
Danny: I imagine—and you mentioned accounting—I actually have a buddy who does something similar with accounting firms. One of the biggest opportunities that he saw was just modernizing the operating back end and operating system.
I imagine that’s a big lever that you can pull, right? I would assume that a lot of these businesses have maybe 20- or 30-year technology gaps or efficiency gaps where there are so many things, especially now with AI, that you could probably do to increase the efficiency of the business without necessarily increasing costs.
Is that what I’m hearing? Is one of the biggest opportunities just modernizing, especially with family businesses or lifestyle businesses?
Sequoya: It’s a risk to invest. Half of ERP implementations don’t go so well, so a lot of times they’ll put that off as long as possible.
If we invest in those types of things—new equipment, automation, AI—there’s a lot of time spent trying to automate processes through AI these days.
That simplifies the business, frees up more time for the employees to spend on more value-creation activities and really helps grow the business.
Who Invests With Borgman Capital?
Danny: Let’s talk about the investors that you work with. When someone approaches you, who is usually a good fit for working with Sequoya?
Sequoya: You and I have access to alternative investments just because we’re in the industry. We know a lot of people, but the majority of individuals out there don’t have access to these types of alternatives—direct investments into private companies or direct investments into real estate.
Our best investors are very successful business owners, usually people who have made a lot of their net worth owning a business. They understand investing in businesses and how you can get such a nice return from investing in these established businesses.
People who understand what they’re getting into and understand that it’s an illiquid, longer-term investment.
All our investors have to be accredited investors, of course, but they also have to understand what they’re getting into.
There are a lot of different types of alternatives. Some people like investing in venture or angel investing, different types of real estate, private debt or other investments.
What we do is primarily buy older family businesses, and people who have either made most of their net worth in that space or really understand those types of businesses are the best investors.
People who want to get access to those investments—like me personally, I invest in businesses on the side outside of our firm because that’s where I enjoy investing. I understand it. I understand the risks and the time frame associated with it.
Those are the types of people that invest with us.
Danny: I find it interesting that there’s absolutely a shift happening right now. We actually just had a guest on a couple of weeks ago. Her name is Shiffra, and she’s with Preqin. Are you familiar with Preqin?
Sequoya: Yeah.
Danny: She’s like the data queen over at Preqin. We chatted for a while, and I think it’s really interesting how over the last 10 years or so, we’ve seen this shift toward alternatives, with PE being the biggest slice of the alternative bucket.
What are the things that, when someone thinks about PE, make it different from public equities? At the end of the day, you’re investing in companies. You’re either investing in stocks or companies through PE, but they’re totally different strategies.
Why do you think so many people are starting to become interested in—and actually investing their money into—these types of investments?
Sequoya: I think historically it’s been hard to get access to these types of investments unless you were investing through a large fund, and you needed a significant net worth in order to get access to those.
It’s becoming easier to invest directly in these things. Now there are platforms like our Pass the Hat platform and other platforms out there. People are getting access to these nice investments.
Historically, you had to be a private equity firm or know somebody to get access to it. The returns have been good over the last two decades, and people are starting to understand the benefits.
Again, unlike public equities, these are all leveraged deals, so you get a big boost in your IRR.
It’s the risk, too. If you put too much leverage on these deals, the bank gets paid first, I always say. But it also really boosts your returns, and the company is the one generating the cash and paying that debt down.
It’s not like if you went out and borrowed money to buy a public stock. You have to personally pay that loan down. It’s a little different structure.
Those who have invested in it see the upside and the benefits and understand the risks.
Pass the Hat: Private Equity for Accredited Investors
Danny: You mentioned Pass the Hat. I want to talk about that. What is Pass the Hat?
Sequoya: That’s our platform for new accredited investors to get access to our deals.
We launched that about two years ago once our investor group was growing so much that we couldn’t really manage it personally on a one-on-one basis.
We hired a third-party asset-class back-office platform to manage this onboarding process for us.
We put all our real estate, private debt and private equity investments on that platform. People can go out there and, if they’re accredited investors—that’s the number one thing—and we have a third party that does the verification that they’re accredited, then they can get access to these deals.
They can look at them, and if they’re not interested in one, they pass on that one. Then they’ll see the next one. That’s kind of how it’s set up.
“Pass the Hat” was something an investment banker I knew when I first launched 10 years ago asked me. He said, “How are you going to raise the money for these? What are you going to do, pass the hat?”
I always thought he was saying it as a negative, but as time went by, that’s kind of what you do. You pass the hat around.
The majority of our investors are large, sophisticated family offices and some smaller institutions. But as it’s grown to more business owners, multifamily offices, ultra-high-net-worth individuals and now any accredited investor who wants access to these, it’s been a nice source of capital for our investments.
Danny: I love that. In terms of the family offices that you just mentioned, are you finding the majority of those to be domestic, or are you also raising from international family offices?
Sequoya: We’ve restricted ourselves to domestic at this point. We don’t need any additional—I know some groups raise internationally. We just haven’t gone that path at this point.
Not saying that we wouldn’t do it in the future. It’s just not a need immediately. We’ve got plenty of interest from investors for all the deals that we can drum up at this point.
Industrial Sale-Leaseback Strategy
Danny: You mentioned single-tenant industrial sale-leaseback strategy. Is that correct?
Sequoya: Yeah. That was kind of an offshoot.
Most of the businesses we buy have an industrial building. The owner owns a building, and instead of flipping those to a third-party sale-leaseback group, we decided about five years ago to build out a real estate investment group.
We set those up as separate investment vehicles. Most of them are large industrial triple-net leases, 20-year leases and strong credit tenants.
It’s not necessarily that we’re buying the business every time. Most all of them are off-market, not through a broker, because we’re talking directly to the business owner already.
They’re just nice investments. Our investors like getting access to them, and it’s been an offshoot of what we’re doing.
The hardest part of our industry is finding good investment opportunities. When we’re talking to somebody about their business, it’s just a perfect offshoot of what we’re doing.
We’re already looking at the credit of the tenant. That’s how we determine the risk of the investment, and that’s what determines the return on those industrial assets as well.
Danny: So, the second investment group buys the building and then leases it back to the business that you’re acquiring as well? How does that work?
Sequoya: Sometimes. Usually somebody else is acquiring a business.
If we’re interested in both the business and the real estate, we usually do that as one acquisition. It’s usually because most business owners don’t just talk to one buyer.
But it has happened where we’ve bought both and set them up as two separate investment vehicles.
Most of the time, we’re buying the real estate where somebody else is the tenant of that building.
Danny: Got it. That makes sense. I was like, “Huh, that’s interesting.” It’s kind of like a DST structure. Or, you know, Costco comes in, they build their warehouse, and then they sell it and lease it back. Interesting.
Finding Deals in a Competitive Market
Danny: We’re coming up on time here. Sequoya, this has been very educational for me, and it’s always great to talk to people in different fields and learn a little bit more about how you size deals up and how you view them.
One question you mentioned—or that you kind of glossed over—but I want to dig into a little bit more is finding deals. That’s the hardest part of this, right? Or one of the hardest parts of this.
How are you typically sourcing your deals? Do you have your own proprietary outreach systems? Are you relying a lot on business brokers? Walk me through that.
Sequoya: We use all the methods. We probably look at about 1,500 deals a year to buy three or four companies, so there’s a lot to go through.
That’s why we have people in offices all around the country.
Really, our best opportunities are when we’re introduced either through one of our investors—that happens a lot—or through a local relationship. They’ll introduce us directly to somebody who’s wanting to sell their business.
Usually it’s somebody getting up there in age, getting burned out or wanting to sell. We go in, meet with them, build a relationship, and sometimes it takes a couple of years before we actually close on that business once we’re introduced.
That’s really our strategy: having people sit in other middle-market cities where relationships still matter. You can get introduced to business owners, and those have been the best investment opportunities we’ve run across.
We try to avoid competitive auction processes or sophisticated investment-bank processes and go after more of the situations where we can build a direct relationship with the owner.
We still have to pay a fair price, but it’s nice to cut out the middleman and go direct.
Danny: Yeah, makes sense. It’s always better, right?
Sequoya: It’s always better.
Danny: No different than in real estate. A lot of our returns on real estate come from not paying a broker fee. You’re saving that just on the front end, and it really boosts your cap rate and your return over the long term.
The Boomer Sell-Off & Opportunities Into H2 2026
Danny: Where do you see the trajectory of this business going in terms of LBOs? Where do you see the biggest opportunities here for you and your investors over the next 24 months?
Sequoya: Fortunately for us, there are a lot of family businesses and founder businesses out there, and a lot of aging Baby Boomers that need to sell.
I was just listening to statistics that 20 years ago only about 4% of businesses were owned by private equity, and now it’s close to 20% 20 years later. I think that trend is going to continue to rise.
Fewer and fewer companies are going public, and a lot more companies are selling to private equity.
I think it’s a good space to be in, and hopefully some of this economic uncertainty sells down so we can get back to some better financing and a little bit more certainty around future cash flows of these businesses.
Danny: Well, now you’ve got me curious. When you say “better financing,” I’m assuming you mean that right now, because of where rates are, that’s impacting your rates, too. It’s not just real estate interest rates—it’s interest rates in general. Is that what you mean?
Sequoya: Yeah. Interest rates have an impact on our returns. Not as much—it doesn’t correlate as much as it does on our real estate investments, where it’s direct.
But on the companies, it’s more the leverage. Banks aren’t as willing to say, “If they would put four turns of leverage on two years ago, now they’ll only do three turns.”
Either you have to pay one turn less for the business, or you’re going to get a lower IRR on that investment.
That’s having more of an impact than really the direct rates, because still, historically, we’re paying pretty low rates if you look at it on a historical basis.
It’s less about the interest rate and more about the uncertainty. Every time there’s a new tariff or some type of war going on, banks are less willing to lend, and sellers are less willing to sell in a down market as well.
Why the Best Funds Are Born in Down Markets
Danny: Yeah. Everyone freezes when there’s any type of uncertainty.
I think what is important, though, is to remember—and I’m not saying this to you, I’m saying this to the audience—that we’ve danced this dance before.
This is not a new thing. History repeats itself over and over and over again.
While there are people who sit on the sidelines or choose to press pause while things work themselves out, I would surmise—because this is definitely true in real estate—that some of the best deals happen during these times.
Sequoya: Yeah, I couldn’t agree more. We’re buying two companies right now, and I’ve got a couple more in the works.
If you look at the best-performing funds over the last two decades, they were all funds that were formed in 2008 because they were buying companies at the bottom of the market.
Timing has a lot to do with your returns, both in real estate and private equity.
How to Invest With Borgman Capital
Danny: On that note, Sequoya, it’s been awesome having you here. Before we let you go, if people want to learn more about how to invest with Borgman Capital, how can they go about finding out more?
Sequoya: They can reach out to us through the website, PassTheHat.com. They can reach out to me on LinkedIn.
We’ve got borgmancapital.com as well. That’s more for business owners wanting to sell their businesses.
Any one of those avenues, they can reach me through.
Danny: Awesome. All those links will be in the show notes and in the description down below.
Sequoya, before I let you go, in traditional Investing Secrets Podcast fashion, you’ve got to leave the audience with one final investing secret. Take it away.
Final Investing Secret: If It’s Too Good to Be True, Walk Away
Sequoya: There aren’t many secrets. The secret is that anything that’s too good to be true is probably not something you want to invest in.
I’ll say that’s the secret. If it sounds too good, if you see anything where the return projections are too high, I just walk away.
That’s the secret I’ve learned.
Danny: Yeah, man. I could not agree more. I actually just had this conversation with someone yesterday.
He was trying to tell me about this special program, and I told him, “Bro, that is way too good to be true. Run from that.”
Sequoya: Yeah, run from that hedge fund that says they have all this money, because I guarantee you it’s not real.
Danny: Exactly. That’s great advice.
Cool, man. Thanks for stopping by, Sequoya, and best of luck to you. Who knows, maybe we’ll do a part two at some point in the future. It was great having you on, man. I learned a lot.
Sequoya: That was good. Thanks for having me.