Can someone tell the typical equity split between the investors and the buyer?
Is there a traditional deal structure?
When is that altered?
Are there milestones often inserted in the payout structure for the searchfunder/buyer?
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by a searcher
from The University of Chicago - Booth School of Business
in San Francisco, CA, USA
in San Francisco, CA, USA
10mos ago
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by an admin
10mos ago
from Massachusetts Institute of Technology in Portland, OR, USA
from Massachusetts Institute of Technology in Portland, OR, USA
You might want to clarify if this is traditional, self-funded or independent sponsor because the answer will differ depending on the model.
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by a professional
10mos ago
from Yale University in Atlanta, GA, USA
from Yale University in Atlanta, GA, USA
As Luke said, it depends which model, but for each the answer is yes. Traditional generally involves the searcher equity getting split over 3 milestones (see the Stanford Primer). For self-funded and Independent sponsor, if you can make the IRR attractive for investors, you can do whatever structure you want. If it's SBA financing, those investors inherently won't want more than 20%.
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