Investors for Self-Funded Search

August 11, 2021

by a searcher from University of Florida - Warrington College of Business Administration in Boynton Beach, FL, USA

Hey all,

I'm gearing up for a search and am looking to socialize with some potential investors. It seems like there are well-defined paths for financing traditional searches and smaller SBA deals but less documented for self-funded deals in the $5-20mil range. I'm looking to search locally in Florida in the $2-20mil size range and would love to connect with folks who might participate in the upper end of that range.

For a short background, I spent 4 years as a lower-middle-market lender followed by 6 years in a top leadership role at a mid size company. I led a sale process and we sold the business earlier this year in the low 8 figures. So I've got some comfort in certain areas but feel a little light on the investor network.

If anyone would like to chat or has a recommendation I'd love to hear from you!

Reply by a professional
from Harvard University in Atlanta, GA, USA

I agree with ^redacted‌. I'd encourage you to look for mezzanine lenders as they support independent sponsors. There are a few that specialize in independent sponsors (dm me for that list). Two mezz funds come to mind: 1) https://www.assurancemezz.com/investment-criteria#aml-banner-screen [in Florida] and 2) https://www.seacoastcapital.com/what-we-do/investment-criteria/ [I've worked with them before, good guys] Also look at this sponsor based financing firm: https://www.searchinvestgroup.com/

Reply by an investor
from University of Pennsylvania in Washington, DC, USA

To me there's 3 lanes - 1) Self-Funded SBA deals (generally $2-7M EV) 2) Traditional Search deals (unique structure in terms of paying to search and generally $10-30M deals) and there's a third lane - "independent sponsors" - for say $7 - 20M EV, the most relevant community and equity structures is the "independent sponsor" community.

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