What is an investor's Incentive to invest on Self-Funded Searcher ?
May 28, 2024
by a searcher from ESSEC Business School in Vancouver, BC, Canada
Hi all, I am a self-funded searcher in Vancouver and am currently searching to acquire. I think it is essential to understand different stakeholders in the PE ecosystem to create a win-win scenario for all parties.
With above context, i wanted to ask following:
Why would an investor invest on a self-funded searcher when compared with a traditional search funder ? What are the incentives? given that usually there is less control , ownership, and lack of an exit plan with self funded.
in New York, NY, USA
It Is definitely harder to do in Canada
Problem there is the lack of the SBA Loan
Here in the states it makes more sense
Our view is that it’s similar to a venture investment in terms of risk and that’s how it’s structured as a minority investor
We let the searcher run the business and raise capital and tools behind them so that we get our money back and they successfully complete their buyout
from Massachusetts Institute of Technology in Portland, OR, USA