Two-searcher search funds - pros and cons?

by a searcher from London School of Economics and Political Science, University of London

4 months ago

Hi, I am curious if there are any searchers with experience from running a search fund with a partner? What are the pros and cons with that and how did you split the upside? Also, how did you see the fact that when you acquire a small company and two new people it may have a big (negative) short term impact on the P/L - was that an issue?

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searcher from Kalamazoo College

Lot of insightful perspectives here! Thank you!

4 months ago | like reply | 1 like

lender from Eastern Illinois University

One interesting point I will make about partnerships if you plan to use SBA financing. If one of the partners stays under a 20% ownership interest, the SBA debt will only apply to the owner that owns 20% or more of the business and guarantees the loan. So you will keep the $5 million is available SBA funding for the second owner. So when you go to do the next deal, you can flip the ownership on that deal and have another $5 million is SBA availability. Just one side benefit of partners if you structure it the right way from an ownership perspective. If you have questions on SBA financing or any other financing options, you can reach me here or directly at --@----.com

4 months ago | like reply | 1 like

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