COVID-Era PE Investments Will Become Chicken Soup Or Chicken Nuggets in 2025

The typical private equity firm that we all grew up with holds investments for 3-5 years. Incidentally, 2020 was the "oh shit" year for private equity and eCommerce. Many woke up, including new funds, and started investing in 2021.

Fast forward another 4 years and here we sit in 2025. Private equity holders are staring directly at the end of their runway. Growth has happened, but not enough. Profits, on the other hand, have often failed to materialize. Often through multiple regimes, programs, the latest technology, and "sure things".

The two options forward are Chicken Soup or Chicken Nuggets.

Chicken Soup: There is a good strategically aligned owner and outcome. And most importantly, there is a story to tell to the next buyer.

This will probably happen to 10% of situations.

Chicken Nuggets: The company will either be liquidated or become completely unrecognizable to its former self.

90% will end up here.

If you are one of these owners at this stage, the options are few:

1 - Get patient and reinvent. Find the pockets of growth, lean into them, and shed absolutely everything else, no matter how painful. This is not for everyone, because there is an opportunity cost for your time and capital.

The key question you need to answer is: "What part of this brand still has a reason to exist?"

2 - Find an interesting buyer who needs an opportunity. This is a tougher road. The number of "brand opportunities" out there are plentiful and most of them are not worth a damn.

The key question you need to answer is: "Who has means, motive and opportunity for an eCommerce growth story in their portfolio?" Identifying a buyer starts with convincing yourself there is a credible story to tell for the buyer, as well as a willing management team to take it on.

The reason this is unlikely is that the number of firms like this are few, and they are being constantly pitched. Like venture capitalists themselves, they can afford to be patient and picky. Your story must stand out.

3 - Some kind of liquidation/bankruptcy scenario. The exit is here, and the party is over. Closing time: you don't have to go home, but you can't stay here.

On the other hand, there is another side of this market where there is more dry powder waiting to invest than there has been in some time. This creates optimism for the future. Most investors would rather bet on the future than an old story for the past. Which to me, makes this a year of reinvention.

It's moving day in the private equity world - are you prepared?