Founder- and family-led businesses generate an estimated 70% of global GDP and 60% of global employment, yet many struggle to access growth capital without sacrificing control. A new INSEAD white paper finds that a growing class of "partnership capital" investors is emerging to help fill this gap, offering minority investments designed to support business as they scale, professionalise and navigate generational transitions while preserving founder and family ownership.
Drawing upon quantitative analysis of 19,327 founder- and family-led enterprises across nine countries with in-depth interviews with business leaders and private market investors, “Building Together: Partnership Capital as a Growth Catalyst for Midcap Founder- and Family-Led Businesses” was produced by INSEAD Wendel International Centre for Family Enterprises (WICFE) in partnership with 65 Equity Partners, a global investment firm with offices in Singapore, Europe, and the United States.
The report explores the untapped growth potential and strategic scaling opportunities for midcap founder- and family-led enterprises across global economies.
Despite their relatively small numbers, midcap founder- and family-led enterprises (generating between €100 million and €1 billion in revenue) are a critical driver in developed economies, generating disproportionately high revenues, employment and investment in innovation. The midcap companies in the white paper’s sample had average revenues that were 42 times greater than their micro and small-enterprise counterparts.
Yet, many midcaps face a persistent financing dilemma. They may not have sufficient scale to seek stock market listing, may have limited tolerance for third-party debt, and traditional control-oriented private equity typically forces founders and family leaders to relinquish majority ownership in favour of a short-term exit horizon. Consequently, a vast proportion of ambitious, mid-market businesses remain underserved by traditional capital markets.
Highlights:
- A financing gap in private markets: Midcap founder- and family-led businesses often fall between the mandates of venture capital and traditional control-oriented private equity. They are typically too mature for venture capital, yet many are unwilling to accept the control-oriented ownership structures and shorter investment horizons (of four to five years) that are typical in traditional private equity.
- Family businesses think differently about growth: The study found that founders and family owners often prioritise stewardship, continuity and community impact alongside financial performance. Many adopt conservative approaches to debt and place significant value on retaining decision-making authority, creating a natural hesitation toward traditional buyout models.
- The demographic tailwind of generational transition: The mid market economy is currently going through a demographic leadership transition. The average age of family business owners globally is now in their late 60s. While 26 percent of family businesses expect to seek outside investment and 19 percent plan to increase non-family ownership over the next three to five years, only 3 percent anticipate an outright sale.
- Partnership capital providers are emerging as the ideal fit: Founders increasingly seek investors who can contribute strategic advice, governance expertise, acquisition capabilities and international networks–rather than just funding. The study identifies an emerging class of partnership capital providers–including global players such as 65 Equity Partners, and regional players such as Intermediate Capital Group, Oakley Capital, New Mountain Capital, Creador, and Quadria Capital–that combine financial resources with sectoral and operational expertise. Built on a foundation of long-term collaboration and flexible investment timelines, they focus on genuine value creation alongside founders and family leaders to support sustainable, long-term growth.
Bala Vissa, Professor of Entrepreneurship and Family Enterprise at INSEAD, said, “For many family businesses, the challenge is not a lack of ambition – it's finding capital that aligns with their long-term vision. Our research shows that well-structured minority partnerships can help these mid-cap firms grow faster, strengthen governance and navigate succession while preserving the qualities that made them successful in the first place."
Alex Stirling, Partner at 65 Equity Partners, commented that, “We see an increasing number of family owned companies going through generational transition, as well as first generation founders seeking non-control partnership capital to grow internationally. At 65 Equity Partners, we believe that minority partnership investing in family-founder businesses requires patience, empathy, and a long-term view — because trust, not control, is what builds enduring partnerships.”
As founder and family-led businesses face increasing pressure to scale, digitise and manage generational transitions, partnership capital could become an increasingly important segment of global private markets—offering a potential win-win for both business owners and investors.
Stanislav Shekshnia, Senior Affiliate Professor of Entrepreneurship and Family Enterprise at INSEAD, added that, "Ultimately, the most successful partnerships are those that combine external expertise and capital with the unique strengths that founders and families bring to their businesses."
Download the full white paper here.
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About 65 Equity Partners
65 Equity Partners is a global investment firm that seeks to partner with founders to create sustainable long-term value. We invest in leading family-owned and entrepreneur-led businesses in Southeast Asia, Europe and the United States, across the consumer, industrials, business services, healthcare and technology sectors. Our offices in Singapore, London, Paris, San Francisco and New York enable us to think globally and connect locally.
We are backed by Temasek and have US$4.2 billion in funds under management.
We have the benefit of being able to leverage on Temasek’s global network and the expertise of its broader ecosystem.
For more information, please visit www.65equitypartners.com.
