By Bryce StirlenPublished On: May 15, 2025

Raising Capital Without Losing Control: What CEOs Need to Know

For many business owners, raising capital is a necessary step toward unlocking growth—whether it’s expanding operations, acquiring a competitor, entering a new market, or upgrading infrastructure. But there’s a common concern that surfaces in nearly every conversation I have with CEOs: “How do I raise capital without giving up control of the company I’ve built?”

The good news is that there are several strategies that allow you to access growth capital while maintaining operational and ownership control. The key is understanding your options—and choosing the right structure to align with your goals.

Debt vs. Equity: Know the Trade-Offs

Most capital solutions fall into one of two buckets: debt or equity.

Debt capital (think traditional loans, asset-based lines of credit, or mezzanine financing) allows you to retain full ownership but comes with repayment obligations, often with covenants that can impact your flexibility. The benefit is control. The downside is pressure on cash flow, especially in volatile markets.

Equity capital, on the other hand, brings in a financial partner who shares in the risk—and reward—of your company’s future performance. Giving up equity means you’re selling part of your business, but it doesn’t necessarily mean giving up control. This is especially true in structures like minority recapitalizations.

The Rise of the Minority Recap

A minority recapitalization is one of the most powerful—but often misunderstood—tools available to middle market business owners today.

In a minority recap, an investor (usually a private equity firm or family office) purchases a non-controlling stake in your company. You get a significant capital infusion to fund growth, take chips off the table, or support a generational transition—without giving up day-to-day control or decision-making power.

You retain majority ownership. You set the direction. And you gain a sophisticated partner who can help accelerate your strategic goals.

Why Investors Are Embracing Minority Deals

There was a time when most investors only wanted controlling stakes. Today, that’s changed—especially in the lower middle market. Many capital providers recognize that founders and operators are critical to future success. They’re willing to bet on your leadership by taking a backseat role, offering value-added support without trying to run the business.

At FOCUS, we’ve seen growing demand for these types of partnerships, especially from business owners who:

Want to pursue aggressive growth strategies without overleveraging
Need liquidity but aren’t ready for a full exit
Are planning for succession or partial buyouts among shareholders

These deals don’t just provide capital—they provide flexibility. Once you bring on a minority investor, they typically stay involved for up to five years. During that time, you maintain control and work toward your goals. Down the road, you’ll have multiple options: sell the entire business once you’ve hit peak growth, raise debt to buy out the minority partner, or bring in a larger investor to continue scaling. It’s a strategic path that supports both progress and optionality.

Getting the Right Capital, from the Right Partner

Not all capital is created equal. And not all capital providers are a fit for your business. That’s why it’s critical to run a disciplined process to identify the right partner—someone who shares your vision, respects your role, and brings strategic resources to the table.

At FOCUS, we help middle market CEOs navigate this landscape every day. From evaluating the right structure to introducing vetted investors, our job is to ensure that you raise the capital you need—on your terms.

If you’re thinking about growth but hesitant to give up control, a conversation is the best place to start. You don’t have to go it alone—and you don’t have to give up what matters most.

Bryce Stirlen is a Managing Director in FOCUS Investment Banking’s Advanced Manufacturing Group. With more than two decades of transaction experience, he has advised on multiple mergers, acquisitions, restructuring and capital markets transactions. Providing customized solutions on complex transactions, Mr. Stirlen has worked for multinational clients across several sectors such as aerospace, defense, automotive, transportation, consumer, healthcare, and general manufacturing and industrials. Prior to joining FOCUS, Mr. Stirlen served in investment banking roles at Bank of America Merrill Lynch, J.P. Morgan and Houlihan Lokey. Notable clients include Boeing, Lockheed Martin, Collins Aerospace, Textron, ATK, Azimuth Technologies, Chrysler/Fiat (Stellantis), CNH, Dana, Magna, Shiloh, Windsor Quality Foods, Helen of Troy, Michael Foods, Pinnacle Foods (Pinnacle/Blackstone), Weber, Mattel, ICON Health & Fitness, Brunswick, Pepsi, Sigma Alimentos and Bar-S Foods. Prior to joining Wall Street, Mr. Stirlen began his career at General Electric Capital Corporation with various roles in finance and operational management. Mr. Stirlen brings a unique skill set to the FOCUS clientele with real world experience advising middle market firms on strategic, operational and financial management, as well as turnarounds. He is also a business owner and operator bringing exceptional understanding and insight on business challenges and opportunities. Based in Chicago, Mr. Stirlen earned his M.B.A. from Northwestern University – Kellogg School of Management – in Analytical Finance and Management & Strategy. He attended University of Puget Sound with a B.A. in Economics.