raising capital for platform strategy

by a searcher from The University of Michigan - Stephen M. Ross School of Business

2 weeks ago

looking to the searchfunder community for guidance on the right type of equity investor for a thematic sector play that will require follow-on financing for both acquisition and growth. having positive conversations with middle-market private equity but find fund structure to be a limitation and a lack of creative thinking by way of value creation. anyone run a build-up strategy that drew on deep industry and market expertise? many thanks!

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investor from University of Pennsylvania - The Wharton School

I ran a thematic buy-and-build in the software space that we exited to PE last year. Happy to chat. I'm at --@----.com

1 week ago | like reply | 0 likes

searcher from Harvard University - Harvard Business School

Thanks ^Searchfunder member‌ for the tag. There is no silver bullet here (if someone has found it, please do share with me :)). I think finding right investor is dependent on the sub strategy you want to follow. In my experience raising funds for a roll-up play is slightly easier as you can define a goalpost i.e., buy X companies, get to Y EBITDA and sell within Z years to a PE company. On the other hand if you want to build a constellation style long term holdco, exit options are less tangible. In either case you can choose to have an economic model that is similar to PE (2/20), VC (20% diluation in each round) or Search fund. My experience is PE investors like the PE model but the economics don't work for a SMB platform.

Not sure if any of this helpful, but happy to chat morer iif you DM me

1 week ago | like reply | 0 likes

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