Hi Searchers / Investors - I haven't seen too much on this topic specifically, so I thought I'd ask the group on this.
I've been investigating avenues within the search space to accomplish the following:
1. Acquire a business with a long-term hold / never sell strategy
2. Raise capital from investors to fund part of the equity injection
3. In the future (i.e###-###-#### years), acquire full ownership of the company (i.e. buy-out investors' equity)
Initial questions I have:
1. Anyone have experience in accomplishing the above? Would love to hear your thoughts / discuss further with you!
2. What capital raise structures / terms have you seen to accomplish #1 & #3 that is appealing to investors get sufficient capital?
3. One example I saw was placing a call right option in the Investor terms (1:26:30 in this video on Acquiring Minds https://acquiringminds.co/webinars/how-to-raise-equity-to-buy-a-business-part-2 ). Anyone have experience in this? Thoughts on an appropriate IRR / Time requirements to exercise the call right option?
4. Any thoughts as it relates to accomplishing the above (i.e. Unrealistic to buy-out investors until senior debt is paid off, etc.).
Thanks for the help and comments here! Much appreciated.
Thanks,
Johnny
Investor Terms: Equity Buy-out for Long-Term Hold (i.e Call Right Options)
by a searcher from University of Alabama - Tuscaloosa
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1. Yes, have done that before.
2. Not structured ahead of time but be the first call from investors who want to exit and make it easy.
3. Call option is a terrible idea. Don't do that.