Funding Sources and Structure for self-funded searcher(s)

September 23, 2025

by a searcher from University of Tennessee - Knoxville in Austin, TX, USA

From what I have gathered the suggested businesses good for self-funded solo/partnered searcher(s) should have an EBITDA of ~ 1M-1.5M. The general multiple for a good business of that EBITDA is 3-5x. That would mean a price of ~ 3M-5M. If SBA covers 90%, that would mean the capital required to acquire a feasible business and not a job is 300k - 500k. If the seller finances, the downpayment could be reduced, but are there any other way to cover that without raising funds? I am very new and I am gathering knowledge from podcasts, reading through the posts and comments here and through books like - The E-myth Revisited and HBR Guide Buying A Small Business. Please share your thoughts and point me to the right direction. Thank you!

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Reply by an investor
from Georgia Institute of Technology in USA

What you're describing is our investing model. We and others will invest but have a structure in place through an operating agreement to feel comfortable with minority holdings. In an SBA backed deal, you can have up to 20% of the control with parties that don't have a PG in place. SBA of course will loan on as little as 10% down but we don't find many deals with that much leverage. A good structure might be 5% from the searcher and 19.9% from investors, and then borrow the rest. Don't forget a Working Capital budget in your planning. The investors in this size of deal usually receive a preferred return such as 10% on the money invested which accures until capital is repaid and a step-up when an exit is achieved or money is distributed as a result of accruing earnings that aren't reinvested. We have models that illustrate all these factors, you're welcome to reach out to receive a simple P&L based model & financial waterfall.

Reply by a professional-advisory
from University of Pennsylvania in Dallas, TX, USA

Guidance in the Independent Sponsor Model I am looking to partner with experienced executives who are interested in owning and running a business I partner with seasoned executives to help them establish platforms as independent sponsors and help them lead roll ups in industries that they know well. I've been an independent sponsor a couple of times in my career, and it was extremely rewarding. This allowed me to run a company with a meaningful ownership stake leveraging capital from third parties. If I can be helpful in your search, the acquisition process, or accessing capital, please contact me here or my email address redacted . My LinkedIn is https://www.linkedin.com/in/jim-tolbert-2338b01/

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