Deal structure

Dear Searchfunders,

We are operating a self-funded search fund in Denmark and have identified our first acquisition opportunity, for which we now need to structure a deal. My initial plan was to acquire a company using personal funds combined with bank financing—essentially without external investors. The idea was to optimize the business post-acquisition and potentially bring in investors later, at which point I could realize some upside.

However, this particular opportunity is larger than our initial target, and as a result, we are looking to bring in investors upfront. My question to you is how you would structure the deal for investors. For instance, if the business is valued at $10 million and we are looking for investors to contribute 40% of the deal ($4 million), how would you approach the structuring of the investment? Would you apply a premium on top of the $4 million investment?

Looking forward to your insights.

Best regards, Michael