Terms for Equity Capital Pool

searcher profile

June 10, 2025

by a searcher in New York, NY, USA

I’ve seen a few rollups where a founding team raised a committed equity capital pool of ~$10-40 million, which they then used to rapidly buy tuck-ins in a sector. What kind of terms are available if one goes this route?
3
5
158
Replies
5
commentor profile
Reply by a searcher
from University of San Francisco in New York, NY, USA
Happy to comment here - there are plenty of independent sponsor-focused funds that look to overequitize at close with the understanding that capital will be deployed for future acquisitions. Typically, you'll overequitize the platform and have callable capital at an initial close (20% - 33%). You can get carry on this capital as well, but these firms are only likely to invest if they also get a piece of the base company and certain structural rights (board seats, observer seats, preferred equity, sometimes control of the company, etc.). Happy to discuss in more specifics if helpful.
commentor profile
Reply by a searcher
from Indian School of Business in Singapore
In our case - we ended up doing a traditional fund raise with an agreed upon pre money valuation and Term Sheet etc - so very similar to a VC round
commentor profile
+3 more replies.
Join the discussion