Looking for advice on structuring $10M-$20M deals with investors

Thanks, Patrick. Appreciate your insight and sharing. So it seems like with self-funded, the searcher does not get an allocation of equity ownership at post-acquisition, i.e. at the starting year of taking on the new company? With Search Funds, seems like they get around 25% allocation of equity.

From what I've seen there seems to be a pretty typical market for how to structure these deals - The PE firms you talk to when discussing Independent Sponsorship typically all come around to the same sort of thing - Take the deal, add what Senior Debt you can, then fill in the rest with Mezz + Equity. At that point, the ownership is divided up in terms of how much of each the various equity partners put it. At that point, the Entrepreneur/Searcher/Sponsor would have a fee structure in which they would get ongoing payments to manage the investment (essentially a salary, and can be literally a salary if they are coming in as CEO), then at exit there is a###-###-#### split of profits after the initial investment is paid back plus the hurdle rate of an established return (around say 12%). So if they put in 5 Million equity, and it sells for 30Million in 5 years, they get 5Million *1.12^5 and 80% of the remaining, with you getting 20% of the upside at that point. The specifics can be negotiated (higher % of upside, higher salary, or lower hurdle rate), but the structure is very typical.