I'm a self-funded searcher and I wanted to understand more on how I structure and pitch investment terms to potential investors. I understand that generally, the investor gets preferred equity and we searchers want to allow them to get a return better than 25%, but can anyone break it down in more detail for me?
Still working on getting the deal terms right so I can pitch to investors. For example, if I had a deal like this:
-$5 million purchase price at 5x EBITDA
-SBA loan of $2.5 million
-Seller Note of $1.5 million
-Raising cash of $1 million
If a potential investor (friends/family) offered me $100,000, what am I giving them in terms of equity?
self funded searcher equity terms?
by a searcher from Babson College - F.W. Olin Graduate School
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.
717 views
28 comments
Sign in to see all replies.
Create an account.