I've seen a few searchers ask whether there are banks/lenders available to cover the up-front costs of due diligence, legals, and escrow/deposits. I figured it would be worth making a post to let everyone know that we do cover these up-front costs for self-funded searchers.
What we offer:
1) We cover all of the costs of due diligence and legals
2) We sometimes cover up-front deposits, although we believe it is generally off-market to put a deposit down, so better to avoid it if you can
3) We offer use of our diligence templates and make introductions to lawyers/accountants/lenders/etc.
4) We will help guide you through the DD process and support you as issues come up. I've personally acquired 11 companies in the micro-cap (lower-mid-market) space, and I've been involved in some capacity in dozens of others. Every deal has some sort of issue in diligence, and how you deal with it can make or break your returns
What's in it for us:
We want to roll our investment into equity in your deal. We're a private equity group looking to make investments in micro-cap companies.
We're very selective in the searchers we fund in this way, but generally we are looking for:
EBITDA: All sizes
Industry: SAAS, B2B, healthcare, manufacturing, industrial services. No construction, no B2C, no retail.
Multiple: 5x EBITDA or less, 2x ARR or less for unprofitable SAAS
Geography: USA or Canada
Why we do this:
1) We get access to interesting investment opportunities
2) We understand diligence risk because we've been through so many deals
3) I remember my first acquisition, and committing $50-100K of my own money without knowing for sure the deal would close was a really tough thing to do. It's time to support others going through the same situation!
We will cover Due Diligence/Legal/Deposit Costs for Self-funded Searchers
by a searcher from Carleton University
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We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
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