Make no mistake. Watch out for your competitor. You need to keep up with the Joneses. They will also be studying this emerging phenomenon of private equity. They might already be meeting with potential equity partners. What would be the worst thing they could do to your business if they suddenly got a cash injection of $1M? Or, if you have revenues in the $6M range, what could the Joneses do with $5M?

A lot of damage, did you say?

What if the Jones’ new, best friend was perhaps John Seminerio, an industry expert in your field and with a bigger vision of the global market? Imagine if the Jones family now had the experienced help to manage the long supply chain, exactly as in the McGregor Socks case, from China and move most manufacturing to Mr. Private equity’s long-established contacts in Shanghai? What if they had Jerry Schwartz, CEO of Onex, one of the leading lights in Private equity, paying attention to your Board meetings and opening his Rolodex?

How do you like private equity so far?

By the way, if your business can’t possibly move production to China because you are in service or transportation, or because your products are too heavy or bulky to be flown economically across the Pacific, equity players will really, really like you because it would be hard to have your business get clobbered by cheaper imports. Mr. Private equity will be hunting down the other players in your industry and pursuing your competitor companies with the determination of the single-minded Star Trek villains, the Borg.

Except that private equity players are mostly a great deal nicer than The Borg. Come to think of it, it’s the public market, with its emphasis on conformity and consistent, reproducible results that operates more like the Borg, treating you as a replaceable number.