can you buy a small company with independent sponsor model

searcher profile

November 14, 2024

by a searcher from Georgetown University - The McDonough School of Business in Washington, DC, USA

getting started in the space ... was wondering how small can you go for a first acquisition? 500k revenue? or less even?

also curious if anyone has used mainshares platform for independent sponsor deals and their experience

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commentor profile
Reply by a searcher
from The University of North Carolina at Chapel Hill in Atlanta, GA, USA
Anything is possible and anything can be negotiated. That said, for a business of that size I think you will have an easier time raising capital under a searcher model, focusing on search investors. Conversely, if the business is $3mm plus of EBITDA, you will probably have more success with an independent sponsor model, focusing on private equity investors.
commentor profile
Reply by a searcher
from Temple University in Philadelphia, PA, USA
Are you going to be living off the fees or taking a salary? It really comes down to profitability, what your goals are, and how much you think you can grow the business. A $500k business could have 50% net margins which would be enough to pay you and likely provide a return to your investors.
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