Would You Buy This Company if You Had to Operate It for 5 Years?

One of the most effective filters I use when evaluating an investment is this: Would I buy this company if I had to personally operate it for the next five years. No shortcuts, no exits, no flipping it to the next buyer, just full accountability and ownership?

It’s a deceptively simple question, but it changes everything. It forces you to move beyond the spreadsheet. You start thinking less about modeled IRR and more about the day-to-day reality of running the business. Would you trust the leadership team? Are the operations tight or chaotic? Do customers genuinely love the product or are they just locked in? Can the business withstand pressure, competitive, macro, or internal? And perhaps most importantly, do you respect the culture and values that drive the business?

This 5-year lens is especially important in private equity, where short-term hold periods can mask long-term fragility. Many deals look great when you’re underwriting to an exit in 3 years, especially if you assume some multiple expansion or cost cutting. But when you’re forced to imagine running the business yourself, owning the outcomes, sweating the details, living with the complexity, the list of truly investable businesses shrinks fast.

The goal isn’t to avoid hard work. It’s to avoid bad businesses dressed up as good investments. This mindset sharpens focus on durable fundamentals, long-term value creation, and whether you’re buying something that compounds over time or just inflating it for resale.

Because if you wouldn’t want to own and operate it for five years... what makes you think someone else will?