WHAT YOU CAN DO: Consider these seven (7) thoughts, which are simply illustrative, and not comprehensive:

1. Don’t Get Too “Pumped Up” by “Projections,” “Forecasts” and “Scenarios.” Private Equity investments are “sold” to investors on the basis of projections, forecasts and scenarios that are quite often overly optimistic. The “small print” is clear that these cannot be relied upon. But when this same “small print” is transmitted to job candidates, the “small print” is sometimes too “small” to make a lasting impression upon an eager mind, most especially when interviewing and negotiating. Simply put, don’t rely on sales-oriented materials.

2. We are often asked, “What is ‘Market’ for this position?” As a general rule, we have little, if any, confidence in the concept of “market” in Private Equity employment. Rather, what counts is a Hiring Manager’s perception of a job candidate as a “likely enhancer” of (i) Revenues, (ii) Relations, and (iii) company Reputation. Those are the true determinants of that candidate’s leverage. In Private Equity employment this is intensified, given the focus on performance over the shorter-term horizon.

Others’ perception of you as someone who is well known in the industry, a proven “closer” and a true “team player” are especially attractive to Private Equity employers. Don’t ask for too much or negotiate too often or aggressively, as being viewed as “high maintenance” in this context is surely and deeply negative. You want to stay with this employer just long enough to create substantial success, and to enjoy the substantial rewards of that success.

3. Wise Navigators in this Context Seek (a) Growth in Responsibility, (b) Internal Visibility, and (c) Objective Metrics of Performance. Why? Because in the Private Equity context, that’s what drives both compensation and job security. In any enterprise that is decidedly dedicated to ROI, those with proven success in important functions are what translate to both (i) likely longevity in the midst of multiple rounds of layoffs, (ii) likely candidacy for promotions over time, and (iii) likely leverage for discussions when the “big money” decisions are made: near or upon liquidity events.

Bear in mind, too, that Private Equity sponsors are always on the lookout for those who represent invaluable Human Capital to “take with them” to their next Private Equity venture, and so tend to reward these employees more handsomely than others.

4. Pay Close Attention to (a) Definitions of “Cause” for Termination, (b) “Good Reason” for Resignation, and (c) Degrees of Employer Discretion in Both. As noted above, in Private Equity employment, the most significant rewards come “at the end,” that is, upon “liquidity events.” One offer letter we recently reviewed for a client defined “Cause” for Termination as “performance below Employer’s anticipation, in its sole and absolute discretion.” On this basis, she could be terminated just days prior to the company’s sale, and lose all of her outstanding equity grants.

In negotiation, we managed to get the employer to change “in its sole and absolute discretion” to “in its reasonable discretion,” which gave her significant protection from loss, as “reasonable discretion” equates to “potential accountability,” and that equates with “risk” to the employer.

5. Depending on Company Growth Stage, Seek Dilution Protection during Later Investment Rounds. Employers that are, or will likely be, in need of further infusions of capital will likely need to issue additional shares and/or new classes of shares, units or other forms of equity. These infusions can easily be dilutive of the value ascribed to your own equity holdings. Seeking dilution protection is important, the two most commonly granted forms being (a) resets of award grants upon specified dilution levels, and (b) ensuring your equity is treated as to dilution to those of a specified management classes.

6. Expect Vesting of Contingent Interests Not Over Time, but upon Liquidity Events. The more commonplace notion of vesting over time, nearly universal in public company employment, is more often than not replaced in Private Equity employment by achievement of Liquidity Events. Whether it’s a form of equity, a carried interest, participation in special distributions or otherwise, it’s Liquidity that reigns supreme.

7. Anticipate, too, Possible Pressure to Co-Invest and Re-Invest. In the event you have accumulated equity from an employer that has been purchased by a Private Equity sponsor, you can anticipate pressure to roll over your thusly-earned equity interests, and to waive rights to “cash out.” Buying into your Private Equity employer gives you “Skin in the Game,” and a very valid argument to be treated no less favorably than, or on a near par with, other “participants.” While it raises the stakes of your participation, it like enhances your potential rewards, too.