What is some advice for thinking about SDE or EBITDA along with Owner Compensation when evaluating a Search, especially in a smaller acquisition? How much should you reserve for reinvestment in the business? With <$2M EBITDA sized opportunities, what is your best advice on distributions to investors and self?
More on Searchfunder
Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
2) I have not seen anyone "reserving" for reinvestment unless CapX is every few years or it is a hotel type investment.
3) Distribution to investors and common is driven by leverage and type of capital structure. If you have high leverage, you may not have material cash left over for distribution. Also, lenders, very likely, will restrict distribution. Preferred dividend to investors will be ok if senior lenders are ok with it.