Resources for finding licensed business partners AND/OR investors?

January 31, 2024

by a searcher from Harvard University in Los Angeles, CA, USA

Hi all! Appreciate help / insight from this community.

Context: I am a self-funded searcher with a very strong background on the "business side" of running a construction / home services company, but I am NOT a license holder. If I want to purchase a licensed trades business like plumbing/HVAC/electrical (looking primarily in California), I know there are a lot of different solutions to make this possible. One very clean solution would be to have a business partner that IS licensed.

Ask #1: Any good resources / ideas for how to seek out a possible licensed partner for this? I have my own network, but open to any other ideas from this community.

Ask #2: On a different topic, any resources/ideas for investors that specifically look to invest in home services / construction businesses for self-funded searches (to put some equity $ in)? I'm still early in my search, but would love any preliminary leads for when I do have a business ready for LOI.

Reply by a professional
from Northern Arizona University in Tucson, AZ, USA

Could be here: https://www.searchfunder.com/post/proof-of-funds-down-payment-investors-for-smb-business-buyers-a-capital-raise-solution

First check with the business and ask if the contractor license is associated with the business or individual. If its associated with the business then you need to acquire the business as a stock purchase. If its associated with the individual and are doing an asset sale you can: 1. You either get the license yourself 2. You get the number two person to get the license - there are other things to consider here... like giving the equity and employment contract 3. You find a partner with the experience, that has the license or takes the test. 4. You get the current owner to remain involved, then he must be regularly employed by the company and actively involved in the operation of the business at least 32 hours per week 4. If you’re using an entity such as a corporation, then the corporation itself must be licensed. You’ve got to get the corporation itself licensed.) You can get an entity licensed in one of two ways: (1) At least 20% of the ownership must be in the hands of a licensed individual (known in CSLB licensing parlance as a “Responsible Managing Officer,” or RMO); or (2) you need to employ a licensed individual (known as a “Responsible Managing Employee,” or RME). As to option (2) in the prior sentence, by “employ,” you have to employ them for at least 32 hours a week, have Workers Compensation insurance in place, etc..

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