Self-Funded Question: Raising Capital for Transaction Expenses

searcher profile

June 16, 2025

by a searcher in New York, NY, USA

Question: Would it be possible to do a small raise of friends and family money ($100k-$200k) for transaction expenses (legal and accounting) as you perform your self-funded search? The F&F investors would have their drawn portions roll into the acquired company as equity. As we all know, self-funded searchers are frequently stressed about the financial runway they have as sunk deal costs start to add up from dead LOIs. This seems it could be a viable solution. I guess this would almost be a hybrid between self-funded and traditional search. The key difference is you're not raising a salary amount and the investors are F&F vs. institutional. Let me know if someone has experience with this, or if it seems like a viable solution. Thanks!
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Reply by a searcher
from Southern Illinois University at Edwardsville in Laramie, WY, USA
You should be able to get your M&A lawyer and QoE accounting firm to defer payment until deal closing. Then these costs are part of the overall finance model. The risk is on broken deals. You still have to pay your professional services, which is why you get your QoE done before you spend on any other professional services.
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Reply by a professional
from University of Virginia in Holmes, NY 12531, USA
It’s surely possible. Please don’t hesitate to drop a note, redacted have seen this in several transactions. Best, Matt
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