Partnering with PE Firms

June 06, 2025

by a searcher in Holly, MI 48442, USA

Hi, Does anyone have experience with partnering with PE firms for acquisitions? I’m experienced operator who also have sold companies. I have a deal under contract in FL. in the behavioral health industry, but I will be maxed out on the $5M SBA threshold soon. Speaking to many banks there is a gap with getting deals funded in the $5M-$15M range as well. Partnering with PE may make sense. Anyone with knowledge of this or have done it that can connect with me?

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Reply by a searcher
from London Business School in London, UK

The counterexample to my comment is Patrick Maclor, who has completed a deal with PE and has written about his experience, which is worthwhile to consider. If you take Patrick's experience as an outlier, I do not believe PE is the correct source of capital. The model is built on the "smart" guys are the investors, who work on the deal for 90 days to close and then want the majority of the economics. Searchers want 15% - 50%+ of the equity. The initial response I have seen, the PE firm believes they can replace the searcher with a salaried person and maybe 2-4% equity. The PE firm will assume the board meetings is were all the value is really created. The gulf between the two views of value is so vast, it is only worthwhile doing if there are not other options. In the EU and US there are lots of investors, so it might be best to partner with an investor set who has a similar world view.

Reply by a searcher
from Stanford University in Sausalito, CA 94965, USA

Yeah I'd wait till you get a little bigger before going to PE. Or season the deal you are doing now ie own it for a bit and prove it out so you'll have better metrics when you go to PE There are lenders who can do pari / conventional on top of SBA And investors in the search fund ecosystem who might be able to do debt facilities, etc, to help you the next couple deals

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