Minorty investors with no step-up?

January 28, 2026

by a searcher from Brigham Young University in Maryville, MO, USA

Hello, I'm actively searching for a home services business doing $2-5mil in revenue. I prefer to have investor help so I'm not so leveraged with SBA debt. Do investors exist that would accept a simple common equity structure instead of a step-up structure? i.e. investor gets 25% ownership, proportional distribution rights, and proportional proceeds at exit. No preferences, no ratchets, no board control. Does this exist, or am I dreaming?

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Reply by a searcher
from Columbia University in New York, NY, USA

I wonder if it would be helpful to think about the situation in reverse. If it was your check, knowing that many of this type of investment would step you up, why would you accept seemingly less? You likely need to make the case that your non stepped up investment could return more than the stepped up investment of others. I suspect that this would be challenging if you are talking exclusively to people who are used to those structures. What is your fundraising experience like? Happy to chat.

Reply by a searcher
from Georgia Institute of Technology in Kansas City, MO, USA

^redacted‌ framed it well imo. Building on that... It seems you understand your proposed structure is atypical. What is more attractive about your deal and/or structure to get investors to agree to it? Also, your question doesn't clearly specify capital structure. In other words, are you planning to finance this purchase with debt? If so, many banks, SBA or conventional, would require a PG for a 25% owner. Had you considered this?

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