Reasonable equity allocation to self-funded searcher?

by a searcher

1 year ago

Hello All,

Would love folks' opinions on what is reasonable in terms of self-funded searcher equity allocation:

- current owner to roll a significant amount of equity (20% area) and remain involved in day to day
- looking to have outside equity sources cover the majority (but not all) of the cash equity (happy to have a preferred equity situation for this group)
- debt ideally would come w/o a PG

I understand that a large common equity ask here might be a reach (especially w/o PG on debt) but thought considering the deal risk I am taking on and for putting deal together that something substantial might be possible. I appreciate your feedback and it will be helpful in going to equity sources for an initial ask. Thank you!

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14 comments

searcher from McGill University

I've heard good things via Acquisitions Anonymous re: Search Investment Group (SIG Partners) willing to put in equity but allowing searchers to retain control. Might be worth an outreach, good luck!

8 months ago | like reply | 0 likes

investor from University of California, Berkeley - Haas School of Business

Very difficult to raise larger checks on good terms for the searcher, Non-SBA debt will also have high interest rates and reduces equity returns, Typical terms are 15-30% equity (with vesting tiers) to the searcher if the money is raised from professional investors. Higher if you raise from non-professional investors, but also a lot more difficult to get to larger checks because the universe of investors accepting self-funded terms is limited

1 year ago | like reply | 0 likes

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