What are the economics of traditional searchfund vs self-funded search?

by a searcher from Universiteit Gent

3 months ago

Does somebody have a simple comparison of the economics of a transaction with searchfund, vs a transaction via a self funded search where the searcher provides part of the equity himself? I'm interested in division of the equity after 5 years, and what the benefits for the searcher are upon a potential sale after 5 years.

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searcher from London Business School

Re equity split, self-funded should be higher but I've seen everything from 30% to 80% for the searcher(s). Depends on deal size, attractiveness / IRR, investor base, etc., ultimately it's just a negotiation. 60%+ seems to be largely reserved for relatively small deals with SBA (personal guarantee)

3 months ago | like reply | 0 likes

searcher from University of Arkansas at Fayetteville

3 months ago | like reply | 0 likes

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