Entrepreneur compensation and equity upside is clear when raising a traditional search fund (up to 25% equity), a self-funded acquisition###-###-#### % equity), and the independent sponsor model (on average 2% management fee & 20% carry).
What about when raising a holdco or similar permanent capital vehicle? There are investors in the community, both institutional and individual, who invest in holding companies. What terms do they require? If a holdco raises $15 million and returns 5x MOIC, what will the investor and the entrepreneur receive?
Any information from investors, those who have raised holdcos, or anyone with knowledge otherwise would be helpful. Happy thanksgiving all.