Any self-funded searchers raise equity capital with >50% equity terms?

The governing target is the investors likely IRR, base case. North of 25% as a starting point, then adjust for encountered market positions. Determine stock price based on that IRR, then determine % of shares you’ll need to sell to raise equity required. % of shares remaining is yours. This is an LBO of an enduring and profitable business, as opposed to a high risk VC investment. 100% of equity does not equate to 100% ownership. Ownership share is dependent on the Market IRR demanded for risk and illiquidity within the asset class. Put/Call options can also reduce investor risk, thus narrowing the range of probable IRR outcomes, increasing the most probable (base case) IRR, thus raising stock price.

^Searchfunder member‌ ^Searchfunder member‌ or anyone else, do you have a term sheet for how something like this would be structured? Is the searcher taking the common stock with the investor(s) taking preferred to mitigate risk or is there more to it than that.

I feel like I must be missing something, why would you be willing to provide the capital to cover the full equity piece to own only 50% of the equity. I appreciate that the value of the equity will increase with debt paydown / growth but it feels like you're paying a dollar for 50 cents. Is that all offset by the structure?

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