What are the incentives for investors to fund a search?
What are the incentives for investors to fund a search or for directly participating/helping in the search process?
Post a question, deal, job, etc...
Make a post...
by a searcher
from University of Pennsylvania - The Wharton School
in Toronto, ON, Canada
in Toronto, ON, Canada
4yrs ago
Share
1 Like
117 Views
Loading...
reply
by an admin
4yrs ago
from Massachusetts Institute of Technology in New York, NY, USA
from Massachusetts Institute of Technology in New York, NY, USA
The main reason that traditional search fund investors invest in the search phase is that they have right of first refusal on any deals that you find. Also in the traditional model where you take search capital, the investors(collectively) are the ones with controlling interest in the business and not the searcher.
reply
by an admin
4yrs ago
from Massachusetts Institute of Technology in New York, NY, USA
from Massachusetts Institute of Technology in New York, NY, USA
Essentially the ownership structure is pre negotiated before the company is even located and the investors get favorable terms because they assumed all the capital risk.
More on Searchfunder
Loading...