"Standard" Legal Fees when Incorporating a Traditional Search Fund?

by a searcher from Columbia University - Columbia Business School

4 years ago

I am trying to get an idea of how much I should pay for legal services when helping set up a traditional search fund - from incorporation of the LLC, to setting up bank accounts, to helping with the legal aspect of raising the search capital. I have heard amounts ranging from $2k to $10k, the latter of which I thought was a little too high for what I believe is something very standard that law firms already have templates for.

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Thanks!

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4 comments

professional from Villanova University - Villanova School of Business

It doesn't sound like that includes SEC filings or blue sky law filings. Selling securities implicates both of these, and should be considered (even an exemption filing, such as Form D can be required, unless a founder's exclusion applies). If a founder's exclusion applies, then perhaps $5-8k if it's very basic and a small amount raised. If not, I would expect $10k+ depending on customization and the amount of filings necessary. It may exceed that depending on complexity and the amount to be raised. It's very dependent on each situation. I'd be happy to have a complimentary consultation call and provide a price based on your situation.

1 month ago | like reply | 0 likes

searcher from The University of Chicago - Booth School of Business

~$5-7k is what I have heard from the firms that work with large numbers of searchers (50+). This would include a review of your PPM (mostly disclosures), entity formation, financing docs for the search capital, side letter outlining expected acquisition terms, and template docs for the search (NDA, IOI, LOI, etc.). No payment until the fund closes, and you generally pay something like $5k and let other expenses accrue and roll into the ultimate acquisition.

4 years ago | like reply | 8 likes

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