Self-funded with SBA vs independent sponsor vs hybrid: which would you pick for a first deal?
Post-exit founder in Virginia building a roll-up of local service businesses: one platform plus a few tuck-ins. I'm stuck between three ways to fund and structure it and would love real feedback from people who've done any of them. 1) Self-funded with SBA: I own 100% eventually, but I'm limited to a smaller first business. 2) Independent sponsor: I get a salary to search, but start at about 30% with investors holding about 70%. I could earn up to about 50% over time. 3) Hybrid: I hold about 70% and allocate about 30% to investors up front. They then earn equity in each additional business I acquire and tuck in, so the terms on that need to be right. For those who've run any of these, which would you pick for a first deal and why? And for the hybrid, how would you structure the tuck-in equity terms?