Does anyone have experience in structuring decision making rights at the investor / board level (specifically with Self Funded searchers). Interested in understanding how searchers have balanced the interests of investors in giving investors decision making input but still retaining a reasonable amount of decision making power for the searcher in making strategic decisions. If anyone has experience in this area please let me know as it would be great to chat.
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Ties in with my hypothesis that we formally keep responsibility for day to day but hand over some control to the majority of investors for major decisions. Helpful to start building a list of what those decisions are.
• The adoption of any employee equity incentive plan or making any material modifications to the terms of such plans (including changing the exercise price or vesting periods of the securities issued under such plans) and any increase in the number of units reserved under any such plan or in the LLC Agreement.
• Approval of or any material alteration in the Company’s business plan (other than clerical, non-substantive amendments).
• Approval and adoption of the Company’s budget for the forthcoming fiscal year or any other applicable period and any material alteration of such budget.
• Entering new lines of business or exiting the current line of business.
• Hiring, termination, replacement, reassignment or modification of the compensation of any executive officer of the Company, and amending any employment agreement with any executive officer of the Company.
• Capital expenditures that exceed $100,000 individually or in the aggregate, unless included in the Company’s budget.
• Entering into one or more capital leases that would result in capital lease payments in excess of $250,000 in the aggregate in any year.
• Making any loan or advance to, or owning any stock or other securities of, any subsidiary or other corporation, partnership or other entity unless it is wholly owned by the Company.
• Any transaction with an affiliate of the Company that is not a wholly-owned subsidiary of the company.
• The approval of any capital call and the determination of the fair market value of any Units issued in connection therewith.
• Any extension of the commitment period or any increase in the amount of the equity commitments.
• Declare, pay or make any distributions on, or agree or obligate itself to declare, pay or make any distribution on, Units or any equity securities of the Company.
• Approval of any transfer of Units (excluding transfers to certain permitted transferees and transfers pursuant to applicable co-sale and drag-along provisions), and admission of any transferee as a Member.
• Create, or authorize the creation of, or issue or obligate itself to issue any equity security, or any security directly or indirectly convertible into or exhangeable or exercisable for any equity security, including entering into any reorganization or recapitalization transaction.
• The creation of a new class of equity security or amendment to the rights, preferences or privileges provided to any existing class of Units.
• The consummation of an acquisition of all or substantially all of the business or assets (whether by merger, sale, lease, license of otherwise) of a third party or entry into a joint venture.
• Public offerings of securities of the Company, any of its subsidiaries or any successor entity of any of the foregoing.
• A disposition of all or substantially all of the business or assets (whether by merger, sale, lease, license of otherwise) of the Company or its subsidiaries, or a sale, change of control, liquidation or dissolution of the Company or any of its subsidiaries (other than the liquidation or dissolution of dormant or immaterial subsidiaries), including any exercise of any drag-along or similar rights.
• The filing of a petition under any chapter of the Bankruptcy Code, the consenting to the appointment of a receiver for the Company or any of its assets, or the making of an assignment for the benefit of creditors of the Company.
• A disposition of assets (whether by merger, sale, lease, license of otherwise) of the Company or its subsidiaries with an aggregate value in excess of $500,000.
• Incurring or guaranteeing indebtedness for borrowed money or amending the material terms of existing or future indebtedness.
• Increasing or decreasing the size of the Board.
• Any amendment to the LLC Agreement, the certificate of formation of the Company or other similar organizational documents of the Company.
• Creation of or holding capital stock in any subsidiary that is not a wholly-owned subsidiary or dispose of any subsidiary stock or all or substantially all of any subsidiary assets.
• Appointing or removing the Company’s auditors or make any changes in the accounting methods or policies of the Company (other than as required by GAAP).