Canadian ETA: How Are Post-LOI Diligence Costs and Investor Commitments Typically Handled?
I’d really appreciate some perspective from people who have actually been through ETA transactions in Canada, either as a searcher/operator or on the investor side.
One thing I’ve been trying to get a clearer picture of is how the period between an accepted LOI and closing is typically handled for a self-funded searcher or first-time operator.
I’ve had quite a few conversations recently and I’m hearing very different views on when an anchor/equity investor typically gets involved, when capital becomes conditional or committed, and how third-party legal and financial diligence costs are handled along the way.
For those who have actually done this in Canada, what did that process look like for you?
Did the operator fund the diligence costs personally? Did an anchor investor or equity group participate in those costs once there was alignment around the deal? Was it structured another way?
I know every transaction is different, but I’d really value hearing what people have seen work in practice, particularly in Canada.
And if you’re an investor, former searcher or operator who has navigated this side of ETA, I’d be happy to connect privately as well.