Can someone tell the typical equity split between the investors and the buyer?

searcher profile

July 30, 2025

by a searcher from The University of Chicago - Booth School of Business in San Francisco, CA, USA

Is there a traditional deal structure? When is that altered? Are there milestones often inserted in the payout structure for the searchfunder/buyer?
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commentor profile
Reply by a professional
from University of North Carolina at Chapel Hill in Atlanta, GA, USA
As Luke said, it depends which model, but for each the answer is yes. Traditional generally involves the searcher equity getting split over 3 milestones (see the Stanford Primer). For self-funded and Independent sponsor, if you can make the IRR attractive for investors, you can do whatever structure you want. If it's SBA financing, those investors inherently won't want more than 20%.
commentor profile
Reply by an admin
from Massachusetts Institute of Technology in Portland, OR, USA
You might want to clarify if this is traditional, self-funded or independent sponsor because the answer will differ depending on the model.
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