500k-750k SDE: Self Funded Search "No Mans Land"?

by a searcher from Michigan State University

2 months ago

I am a self-funded searcher, and I keep coming across solid businesses in the $500k-$750k SDE range.
The "official line" from the well-known self-funded search investors is they are looking for deals with 750k+ in SDE (preferably $1m+).
On the other hand, I assume there are relatively few searchers with $500k personal deployable cash (750k SDE at 4x EV multiple = $3m, $300k (10%) down + 150k (5%) post-close liquidity + $50k closing costs.)
How are these deals getting done? Are the established investors coming down? Is it primarily friends and family coming in at this level? or are searchers just bringing their own cash?
If you or someone you know has bought a business in this range I would love to hear your story.
Thank you!

10 likes
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30 comments

searcher from University of Toronto - Joseph L. Rotman School of Management

Senior debt, large VTB/Seller Note, contingent payments and Equity (passing the hat around)

6 days ago | like reply | 0 likes

searcher

$500-750k SDE companies are right in SBA land. 10% equity, 90% SBA, OR using 10% seller note to offset need for 10% equity from borrower. Hit me up for details.

2 months ago | like reply | 1 like

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