Self funded searcher investor terms.

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August 12, 2018

by a searcher in Hartford, CT, USA

Wondering everyone’s opinion on what would be fair self funded search deal terms with investors. 
 
 
 Does this change with deals over $5m, $15m? 

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commentor profile
Reply by an investor
from Dartmouth College in 80 S Main St, Hanover, NH 03755, USA
Adding to Greg’s insights, also has a lot to do with the group you assemble, and how they think about risk and returnfor their “mandate”. If you have a very diversified group of family offices and hnw, that don’t do a lot of direct buyout type investing, that you assemble (on a low priced deal, etc.) you may achieve better terms as the sponsor (ie the preferred return alone may be attactive to them relative to their alternatives). Another example (easier to achieve for more experienced sposnors) If deal is cheap enough on multiple basis or has some assets, you may find a lender who is willing to give away a lot more equity (and or via structured seller note), but while these examples exist, my advice would be to seek a solution in the center of the bell curve, particularly for first time sponsors, or if you have any real question about support for the deal you want to do. Good luck.
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Reply by a searcher
in Bedford, OH 44146, USA
"However, between 2008 and 2017 Harvard Business School graduating classes have shifted from 36% self-funded to 62%, reflecting better understanding of financing structures that see equity ownership levels greater than 51%, averaging 70% and the relative ease in securing leveraged debt.However, between 2008 and 2017 Harvard Business School graduating classes have shifted from 36% self-funded to 62%, reflecting better understanding of financing structures that see equity ownership levels greater than 51%, averaging 70% and the relative ease in securing leveraged debt." - Jim Sharpe-
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