Intermediaries requiring Proof of Funds from Unfunded Searchers

January 30, 2018

by a searcher from Harvard University - Harvard Business School in 2613 Highland Haven Dr, Austin, TX 78725, USA

I'm an unfunded searcher, and about a third of the time I work with an intermediary I have to navigate the Proof of Funds conversation. Currently, this is only time consuming as I'm able to explain my way around it. However, I expect it will be a roadblock at some point in the future and would like documentation of some sort on hand to keep things moving quickly.

Is there a standard document unfunded searchers use for these situations?

Thanks in advance for any ideas/suggestions.

Reply by a lender
in Yorba Linda, CA, USA

Hi Travis, as a lender who works with both search funds and M&A intermediaries, I am keenly aware that many of them are somewhat concerned that a search fund will have the ability to close on both the debt and equity side. I can't speak to the equity piece, but I can help on the debt side with pre-qualification of the deal and with my experience in closing search fund deals. I don't believe they are looking for a standard format, but just a means of being reassured that a searcher has both debt and equity ready to go if a deal is agreed upon. Let me know if I can help on the debt side: redacted

Reply by a lender
from Cornell University in Area St, McHenry, IL 60051, USA

Travis - I'd be happy to talk. We're a flexible SBIC Fund that invests a combination of debt and equity in our transactions. We've funded a handful of search deals -- especially searchers who seek flexibility, responsiveness, and an aligned equity partner. I'd be happy to discuss ways we've worked with other searchers in the past to provide support letters for both debt and equity. Send me an email at redacted and we'll connect.

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