Advice on incentives for searchers targeting holding rather than exiting

searcher profile

March 15, 2024

by a searcher from University of Melbourne in Melbourne VIC, Australia

Hi, im exploring working with a fund through the serach and acquisition phase. They are looking to hold companies long term (as opposed to exit).

Given there will be no exit, how do people recommend structuring the searchers comp? Happy to take equity but also would be looking for other performance bonuses tied to outcomes e.g. Revenue Growth, Cost Out etc.

Are there any benchmarks, resources or general advice people could provide here? For context, the businesses would be 2-10m in Revenue. Thanks

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commentor profile
Reply by a searcher
from Liberty University in Rochester, NY, USA
I guess I am a little confused with the ask. It says you are looking to help a company through search and acquisition and then performance based outcomes during operations. I would start by getting clear on what it is that you are doing for the company? Is it operations, is it just searching, etc. If you are helping search, acquire and operate then I would certainly want equity if not then it could just be transactional type rewards (commissions, etc.)
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Reply by a searcher
from Universidad Internacional del Ecuador in Cuenca, Ecuador
Hi Tom, if the searcher will become CEO of the acquired business, check out the following compensation structure used by Michael Girdley's holding company: https://twitter.com/girdley/status/1591797487756378113?t=LtQD09LNAjnewkE0lTefwg&s=03
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