What kind of share price vs total raise did you do? In your experience was it better to have larger blocks or give potential investors the option of customizing their investment value? For example, on a $400,000 raise, you could do (at the extremes) $100k x 4 or 40 x $10k.
thoughts?
Clearly you are looking for individual or fund who can afford to invest 10x search ticket size and be comfortable with related risks. $25-40 difference does not seem to be huge from this angle and searcher should target higher ticket per investor.
Here comes another thought - say we funded by 10 or less investors and 3 of them drop ahead of an acquisition due to various reasons (not target-related) - now we need to find an equity plug that may be tricky, especially if you are not in the US market. Having wider investor base where you know each other would help in such situations.
Now from investor perspective - even with sufficient funds one may prefer to buy option to invest at lower price, maybe invest in 3 SFs @$10k instead of 1 SF @$30k to spread the risk and have wider optionality at acquisition investment stage. Say one SF ends up unsuccessful, one will find great opportunity and another one will come with good opportunity. In this case investor can take 1-2 investment options in full and 50% premium from rollover of remaining 2x$10k tickets will cover unsuccessful SF ticket loss.
Looks like we are falling to a crowd around the table, can someone bring more chairs please? Neither investors, nor searcher would want to have too many people around as interaction can become unmanageable. Potential solution here may be to have active core investor base who want and can be involved in the process and passive investors with limited involvement.
It would be interesting to hear if there is such practice on the market and whether investment terms anyhow differ in-between investors as active ones may contribute via ongoing coaching, meetings with searcher, advice etc. Why would someone take small $10k ticket, have less than 10% stake and spend time for a benefit of other investors? This looks like the real factor limiting number of investors to around 12 rather than size of the ticket.
And 'last' point that should actually come as first - what is the size of the search fund raised? I wonder whether it is a bit more or lot more difficult to raise two-searcher fund.
Having said all the above - I am not a practitioner here and would be good to hear investor view. Maybe some will just say - I don't care of a search ticket, real decision comes at investment stage when you may loose real money.