I am in the beginning phases of learning about search and evaluating options. After reading "On the Nature of Debt", I had a few questions about how deals are typically structured and how personal guarantees come into play.
It would be helpful to gain clarity on the following:
1. In a typical traditional search, what is common debt to equity ratio?
2. In a typical traditional search, do searchers frequently take on debt with personal guarantees?
If yes, how do you mitigate this? Are there scenarios (other than funding with no debt) where investors absorb the personal guarantee?
Would love links to any resources to help me learn more about this topic. Thank you.
Understanding Debt Structure and Personal Guarantees
by a searcher from Northwestern University - Kellogg School of Management
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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.
The only mitigation once there is a PG on play is to arrange your life to have no assets in your name, pay off the debt as quickly as possible, or settle into the warm, goey world of everything on the line-ness.