Worked with a lender (bank/mez) that overcame "key man" risk?

March 21, 2023

by a searcher from Emory University in Marietta, GA, USA

Hi, Has anyone worked with a lender that got over "key man risk" in relation to a founder transition when other lenders struggled to do that? This specific transaction is an educational services business where the Founder created the content and is the primary sales person. I think the combination of a good transition agreement & the industry strength beats the transition risk. If so, which lenders / mez capital providers did you work with?

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Reply by a searcher
from Indian School of Business in Raleigh, NC, USA

I was unable to do so on one deal that I looked at which sounded similar to this. The founder had built up a massive presence/brand/following on social media and it did not seem like that personal brand could be transitioned. But if they are just handling content creation and sales, perhaps it could work. One approach could be to just speaking to LOTS of different banks, each has their own underwriting standards which change over time. On a recent deal I had to speak to nine (9) different banks to find the right one. You can get local lender recommendations near that business from the broker, your lawyer (if you hire local), Q of E provider etc. You can get national names from here in Searchfunder. There are also aggregators who can help.

Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

We have had some success building the case of relatable experience. I am happy to have a discussion. We are a Commercial Loan Brokerage Shop with over 500+ funding partners. You can reach me here or directly at redacted

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