Investor Brokers?

November 08, 2024

by a searcher from University of Minnesota - Twin Cities Campus in Marysville, WA, USA

Hi everyone! I know there are lots of lending brokers in the Searchfunder community (I know and have spoken to several of you!), but I'm wondering if there are similar brokers focused on raising equity investments. If you exist, I'd love to speak with you!

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Reply by a professional
from Marquette University in Minnetonka, MN, USA

Direct placements are reserved for the best assets (i.e. big-deals) and likely more sophisticated deep pocketed sponsors. Houlihan, Lincoln etc have this service. https://hl.com/insights/the-takeaway-a-qa-with-matt-swain-on-direct-single-asset-private-equity-investments/ There are others like Brighton House that do this on a select basis https://www.brightonhouseassociates.com/ for 'smaller' deals. Generally, there is a reason e.g. a sponsor needs to be able to address any skepticism as to 'why' the sponsor can't raise the dollars on its own? Is the timeline too short? Is the deal not that attractive and requires wider marketing to find interest? Hopefully the answer is that the raise is too large for traditional set of HNW LPs, the sponsor is so active with commercial diligence and integration planning that it needs an extra set of hands on capital raise, and/or the deal is so large/attractive the IB is essentially endorsing the project as likely to be successful so they agreed to spend lots of time on the direct despite any potentially negative detractors. In any event, sponsors should always be meeting and prospecting LPs in advance of actually needing capital. Likely not to get any commitments after one meeting/teaser on a new deal that has to close in 45 days without some prior contact.

Reply by an investor
from University of Oxford in Austin, TX, USA

If you have a compelling deal you will be able to find investors with a modest amount of effort. You can find folk on this exact forum or the Pursuant Capital database. Most investors will have a network of others they can connect you with.

Be careful not to do "general solicitation" unless you've done the regulatory legwork - https://www.sec.gov/resources-small-businesses/capital-raising-building-blocks/general-solicitation

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