Many business owners are wary of private equity firms. It’s not surprising given the negative light in which the industry has at times been portrayed. But despite the fact that plenty of private equity firms don’t fit the stereotype, this uncertainty still raises a good question for anyone thinking about entering into a private equity partnership: How do you know if you’ve found the right partner?

There are, of course, a myriad of considerations for a business owner before entering into such a partnership. However, the four most important all relate, directly or indirectly, to the people, the men and women, who actually make up a private equity firm.

1. Culture

Culture often plays a huge role in any company, particularly those that are family- or founder-owned. Culture is one of those precious intangibles that’s incredibly important to both owners and employees. For owners, culture is often tied to the company’s legacy. As it relates to employees, a common concern amongst sellers is the future happiness of their employees, who typically worry about ownership changes. Thus, sellers should consider how a private equity partner will (or will not) maintain the culture of their company. 

One of the best ways to gauge a firm’s respect for and attitude towards company culture is to look at the culture within the firm itself. A seller will almost certainly visit a potential partner’s office at some point during the transaction process and can learn a lot just by looking around. What is the office atmosphere like? Do the employees seem happy? How are they treated? How does everyone interact? Any firm can say that they respect and appreciate culture, but sellers should look for a firm that walks the talk.

2. Talent

Amidst all the talk of multiples, quality of earnings, adjustments, projections, etc., it’s easy to forget one of the most important things about the value of a company: It’s only as good as the people who run it. Private equity firms vary in their approach to talent. Some are always looking to back an existing management team, while others welcome the opportunity to build out the team. A lot of this can also depend on the needs of the company and the seller’s preferences. However, when a seller is looking for a partner to truly take a business to the next level (as all sellers are when they look to roll proceeds into the PE-backed deal rather than cash out all together), there is almost always a need for more talent. The company should “over-hire”—in other words, hire for where the business is going, not where it is at the time of close.

Furthermore, no matter how great an existing business is, bringing the right people—and the right combination of people—to the table can really move the needle. Accordingly, sellers should look for a firm with a dedicated talent function and a deep network of executives and advisors. Board composition can also be telling (for example, are directors independent or all employees of the PE firm? Are they active? Are they the type of people that could really add value?).

3. Character

Anyone who has partnered with a private equity firm will attest that it’s like a marriage. And it’s true: the parties are legally bound, spend a lot of time together and will inevitably have disagreements. Sellers should evaluate a potential private equity partner in this light, looking for a firm made up of genuinely good, reasonable people who are willing to have open and honest discussions. This is particularly important when a seller is giving up majority ownership. 

While it may seem obvious that sellers should seek good and honest partners, it’s easier said than done. Character can be difficult to assess, especially in a formal process, but there are things that can shed some light. As mentioned above, sellers will have an opportunity to visit the offices of potential partner firms, and the questions related to culture will provide some insight. Another great tool? References. Conversations between sellers and former or current founder-partners can be incredibly valuable. 

4. Price

Last but not least, sellers should (and obviously will) consider price. What does this have to do with people? A lot, actually. All private equity firms are going to use certain benchmarks to determine valuation ranges and then subsequently adjust those ranges based on a variety of factors. As the process moves along and the list of potential private equity partners gets narrowed down, valuations will vary less and less. This is where people make the difference. 

Because initial bids aren’t binding, there’s nothing stopping a firm from putting in a bid with a markedly above-market valuation and then re-trading further along in the process. Sellers should look for firms who are honest and upfront about their valuations and won’t throw out ridiculous bids just to get to the next round. (This ties in with the character considerations above.)

Another important consideration is a future transaction, the so-called “second bite of the apple.” When a seller maintains equity in the business post-transaction, it’s quite possible that the second bite will be worth more than a turn or two in the initial deal. The highest bidder isn’t necessarily the best partner for the long game.

Moreover, the same sentiment mentioned earlier, that a company is only as good as its people, applies to private equity firms, too. A firm is only as good as the people within it. Lots of things can happen throughout the life of an investment, and there will inevitably be bumps in the road.  Even the best businesses are impacted by external factors at some point. It’s easy to be a good partner when things are great. What sellers really want is a partner who will be supportive when the going gets tough, which will make celebrating success that much sweeter.

Whitney Krutulis is the director of business development at Sterling Partners.