Economics and structures for nonfunded searches/single deal funds

searcher profile

April 17, 2020

by a searcher from University of Pennsylvania - The Wharton School in New York, NY, USA

Hi all,

I am curious as to what economics people have seen to raise capital for a single deal fund or no funded search? Specifically, would love to hear structures where the searcher retains more upside even if that comes at guaranteeing a higher preferred/downside protection for investors.

Thanks!
feel free to message me if you’d prefer to have the conversation offline

3
9
297
Replies
9
commentor profile
Reply by a searcher
from Yale University in Boston, MA, USA
appears like deal size matters alot. if SBA 7(a) type loans take care of 80% of the deal size of $5m and the investor pitches in the last $1m - you can retain majority ownership of the company. instead of if the deal is like $20m, and the funders are putting in a large equity check: at least you have 15-25% like a traditional funded searcher
commentor profile
Reply by an investor
from Carnegie Mellon University in Philadelphia, PA, USA
Very interested to hear what you find out. I'm starting to reach out to investors and wondering whether and how to discuss equity splits, target IRR, multiples of cash invested, etc.
commentor profile
+7 more replies.
Join the discussion