Does anyone know of investors that are open to (or focus) on larger deals?

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February 24, 2020

by a searcher from Massachusetts Institute of Technology - MIT Sloan School of Management in New York City, NY, USA

Preferred target size would be revenue between $30m - $150m and EBITDA margins > 10%.

I currently run a $125M full P&L with good EBITDA margins with all functions reporting into me. My previous roles include running full P&Ls and also functional expertise in operations, sales, and product management.

Ideally, the investor would be the sole source of funding, but also open to a handful of investors.

Thanks.

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Reply by a searcher
from The University of Chicago in 2122 W Le Moyne St, Chicago, IL 60622, USA
You may be more interested in the Independent Sponsor model vs. the Search Fund. They're similar, but an independent sponsor typically doesn't raise search money up front, and brings in institutional capital (PE funds vs. search fund investors) once they have a deal under LOI, usually in an industry where they have deep relationships and expertise. The economics for the sponsor are quite different than a typical search fund.

McGuireWoods has a lot of programming in this space: https://www.mcguirewoods.com/services/industries/Private-Equity/independent-sponsor
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Reply by a searcher
from University of Pennsylvania in Indianapolis, IN, USA
Yes, there are many groups who will back operators (Entrepreneurs in Residence if they hire them for a search) and prefer to write larger checks. They will typically want control in the deal, but even a small equity stake in deals of that size are lucrative.

Even better if you can get the deal signed up before taking it to the sponsor because you will have a bit more leverage assuming you aren't planning to chip in a large equity check yourself. I know several groups who do these types of deals and would be happy to discuss.
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