Is Your Capital Structure Built for Your Win, or Just Your Investors'?

Hey Searchfunder Community, Your capital structure isn't just a document for the lawyers; it's the blueprint that determines if you build real wealth from this journey. Before you get too far down the path, you need to internalize the real-world implications of these key terms: That 1.5x Step-Up on Search Capital: It's not just an industry standard; it's the bedrock of trust with your first investors. Getting this right is what gives them the confidence to write the bigger checks for your acquisition. Your 3-Tranche Equity Vest: This is your path to wealth, but remember—you hold Common Equity. Your investors' Preferred Equity gets every dollar back first. You need to know exactly what IRR hurdles you have to clear for that performance tranche to kick in. It's often the difference between a good outcome and a life-changing one. The Personal Guarantee on SBA Debt: Be extremely careful here. A PG puts your personal assets on the line. For a 25% stake in the business, the risk is almost never worth the reward. Your best investors will be aligned with you on avoiding this. The Strategic Seller Note: This isn't just a way to fill a gap in funding. It’s the ultimate signal to your other investors that the person who knows the business best has faith in you. We've tried to distill these hard-won lessons into a direct, practical guide on Searcher Insights. No fluff, just a clear breakdown of the financial engine you're about to build. You can read it here: https://searcherinsights.com/the-fundamentals-of-search-fund-capital-structures-2025/