Input on deal structure -- specific deal

Member resources:

Frequent asked questions:

What is Searchfunder.com?

Searchfunder.com is an online community of searchers, investors, lenders, brokers and other professionals. Over 80% of those involved in searchfunds maintain a Searchfunder account to help them network, hire, and mentor others.

What are the benefits of membership?

In addition to accessing the most active online network of business buyers, Searchfunder licenses research that is simply not cost effective for individuals. Access over 15,000 industry reports and 50,000 transaction financials. You also get monthly credits for contact information for your company sourcing campaign with the option to purchase more at drastically discounted rates. Searchfunder has pre-purchased access from these data providers in order to empower individual buyers and to help searchers level the playing field versus private equity.

Do you have deals?

While we are primarily a buy-side network, we do have hundreds of brokers that regularly post deals to the community.

Can I find an internship on Searchfunder?

Absolutely! We have the industry's largest intern job board. If you are considering a search, the first step is to help another business buyer so you can hit the ground running.

What does it cost?

Searchfunder is a subscription service. We offer flexible monthly, annual and lifetime memberships.

Monthly

$79 / month

Annual

$19 / month

Lifetime

$432 / once

Those who maintain an account with us for over 4 continuous years are permanently added to the community without the need for a membership.

Do I need an MBA to join?

While a large number of our members come from dedicated programs at Harvard Business School, Stanford GSB, Chicago Booth, and other top programs, searching is no longer reserved for the elite. With the current abundance of dry powder in private equity, and an increasing number of business owners reaching retirement age, good deals rarely go unfunded.

Post a question, deal, job, etc...

Make a post...

Complete registration to post.

by a searcher from Thomas More College
in Cincinnati, OH, USA

2yrs ago

Input on deal structure -- specific deal

I'm looking at a company, where the retirement age owner has taken their eye off the ball in the past 1-2 years, which impacted profitability. I believe it can be turned around based on my experience and the stable revenue. Seller indicated their preference for a "revenue share" deal structure. My concern is that the higher priority is increasing profit, so an earnout based on profitability seems more appropriate. Another factor is the WC, particularly the Inventory. What deal structure would you offer?

2021 2022 2023 Projection Sales 5,015 4,790 5070 COGS 3,428 3,190 3,568 68.3% 66.6% 70.3% Gross Profit 1,587 1,600 1,502 31.6% 33.4% 29.6% Adj EBITDA 420 298 80 8.37% 6.22% 1.58%

Balance Sheet
Assetsredacted,400 (Inventory is 625, FFE is 450, AR is 425) Liabilitiesredacted

2 Likes

189 Views

reply by a searcher 2yrs ago
in New York, NY, USA

Is revenue share the only element of acquisition? or is that combined with some other equity financing? If the current owner is letting you take over his company for $0, and is asking for a certain % revenue share, then that's a different story with its own dynamics - what % of revenue share, how long, is there a cap either based on total revenue figures or revenue+ timeline?

reply by a searcher 2yrs ago
from Bentley University in Exeter, NH 03833, USA

What has caused the erosion in Adj. EBITDA? I support the royalty on revenue or gross margin, as the seller will likely take the view or perception that EBITDA can be "spun" to an outcome though the business is growing.