SELF FUNDED SEARCHER EQUITY TERMS?
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?