Let's say SearchCo, LLC is formed with 10 investors and raises $200,###-###-#### years later, SearchCo, LLC finds XYZ Corp to acquire for $6 million, financed through 1/3 cash (reg D raise), 1/3 SBA loan, 1/3 seller note. At the time of the acquisition, some SearchCo, LLC investors want to take their cash step-up and walkaway from the deal, while some roll their stepped-up investment and invest in the $2mm Reg D offering to retain their pro-rata economics.

Structurally, what's the best way to accomplish this where investors have the election to roll or walkaway at the acquisition?

Do you form NewCo, which raises money (Reg D $2mm) from both pro-rata SearchCo, LLC investors and new investors, then NewCo acquires and closes both XYZ Corp and SearchCo, LLC at which time SearchCo, LLC investors get their stepped-up consideration based on their cash or stock election?