Deal before reaching investors

searcher profile

July 21, 2020

by a searcher from Universitat de Barcelona in Barcelona, España

Hi everybody, I have an excellent deal very appropiate for a Search Fund but I haven't approached investors yet. Should I start sending the deal to investors or should I leave this opportunnity and raise the search fund in a traditional manner?

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commentor profile
Reply by a searcher
from Claremont McKenna College in Los Angeles, CA, USA
Valuation depends on a bit more than the high level info you gave. 8x could be a steal or expensive depending on the industry, recurring revenue and a few other factors. If you have the deal under LOI consider going the independent sponsor model and raise capital for that specific deal. You may be able to get slightly better economics
commentor profile
Reply by an investor
from University of Texas at Austin in Austin, TX, USA
Dollars follow good deals and operators so presenting a deal teaser/summary to potential investors will help you 1) gauge real investor interest 2) triangulate investor perspective to help you stress test the deal 3) align the economics between searcher and investors.
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