Bringing in a co-CEO or senior operator after finding a target

May 07, 2026

by a searcher from IESE Business School in Barcelona, España

Everyone, Curious to hear from searchers who started the journey solo, found a target company, and then brought in a co-CEO, operating partner, or senior hire to help lead the acquisition and post-close transition. At what point did you bring that person in? Before signing, between LOI and closing, or only after the acquisition? And how did you think about role definition, investor alignment, and economics? I’m particularly interested in whether their compensation or equity-like economics were included directly in the closing terms / investor documents, or whether this was handled separately after close. Would be very helpful to hear real experiences, lessons learned, and things you would do differently.

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Reply by a professional
from University of California, Hastings College of Law in Petaluma, California, United States

Great question and one we see come up repeatedly in the lower middle market. Also, not a Searcher but one who works with Searchers day in and out. :) From what we have observed working with searchers and sponsors across different deal structures, the timing of bringing in a co-CEO or operating partner tends to fall into one of three patterns, each with meaningfully different outcomes. Before LOI is the least common but often the most successful. The searcher and their operator are aligned on the business before terms are set, which means the operator's perspective actually informs the diligence approach, the 90-day plan, and sometimes the price. The downside is commitment risk on both sides before a deal is confirmed. Between LOI and close is where most thoughtful searchers land. You have enough conviction to have a real conversation, the operator can contribute to diligence and transition planning, and there is time to work through economics and role definition before day one. The challenge is that exclusivity windows are short and diligence is consuming, so this period is often more compressed than it feels. After close is the most common and it can absolutely work. The key is that the operator arrives with a very clear mandate, strong seller introductions, and a transition plan that was built before they got there. Where it tends to get harder is when the operator inherits a situation they had no hand in shaping and has to build trust with a team that is already in transition mode. On economics, the cleanest structures we have seen handle this in the investor documents at close rather than separately after. Separate arrangements after close create misalignment risk with investors who underwrote a different cap table, and they are much harder to unwind if the relationship does not work out. The one thing most people say they would do differently is start the operator conversation earlier than felt comfortable. The instinct is to wait until the deal is more certain. But the operator who joins with full context of the diligence process is almost always better positioned than the one who inherits the outcome of it. Happy to share more on how the matching and structuring side of this typically gets handled.

Reply by a searcher
from Morehouse College in Atlanta, GA, USA

We're looking at the deal with a potential operator. I find it's helpful to bring them along the journey.. reduces friction on the backend.

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