Exiting Investor on a Traditional Searcher

by a searcher from École Centrale Paris

3 years ago

An investor in our traditional search fund told me that he no longer has enough disposable capital to invest on a possible acquisition. We are still searching and don’t have a potential transaction as of today. What are our alternatives ? Is it possible to sell his unit to someone else outside of our investor pool ? There will probably be a ROFR of the current investors, but ideally, I would rather sell outside of my current cap table. Thank you all in advance !

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6 comments

searcher from University of Utah - David Eccles School of Business

I don't think there is a lot of choice unless you can find additional partners to make it work. Good luck!

5 months ago | like reply | 0 likes

searcher from Ivey Business School at Western University

Yeah unfortunately not alot you can do here, barring some flexibility in your legal docs. In reality that person is probably not the only investor who will not bring follow on when you look to fund your deal. Each investor has a slightly different style and pain points so it's very tough to find something that every investor wants to follow through on. Usually if you have a good enough deal, other investors in your fund will pick up the slack or you can reach out to others In the community to pick up the rest.

3 years ago | like reply | 0 likes

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