Hybrid PE/Venture deal structure

I run a venture builder and a B2B SaaS agency.  I am looking for resources about structuring hybrid deals that are essentially MBI, or partner buyouts.  Also looking for recommendations on if we are going the wrong direction.  Should we try to go for full acquisition and then management buys back in?

Over the past several months we have been approached by several B2B SaaS companies that fit in the following baskets:


  1. Accelerator/Angels funded the company 5-10 years ago.  Investors are looking to exit, but entrepreneurs feel the company has room to grow.  We are offered to buy out investors + add some growth cash + install our operating team to help with product engineering and growth.  

  1. Seed-series A  companies looking for us to work with them, but also put skin in the game with a hybrid cash + services investment.  

  1. Bootstrapped company with one founder looking to exit, the other wants to stay on.  The remaining founders see us as potential long term operating partner.  

Our team is looking to bring in LP's who will bring the up front investment capital.  Then our company will bring the operating investment post-close.  We build internal teams that will be 100% dedicated to these investments with product development, and product marketing teams.   

Deal might look something like this:

$1.5 million to buyout current investors (This capital would come form LP's)

Our team will invest $500k over the first 12-18 months in operations.  (This capital would come from our internal team).

We have been doing this investing structure already with our venture studio spin offs, however there have been no outside investors there.

How would you approach this hybrid structure?  How could we structure our ongoing operations in the same SVP with private investors who bring in hard capital? 

Also, how can we structure control in the company since we will be joining operationally?  

You might ask why is this attractive to an investor:

  1. We can get them into companies at a steep discount (maybe last round was $10 million, but due to our operational capabilities they want us in so they will over 30-40% discount). 

  2. We have experience scaling SaaS companies, so they want to invest along side us. 

  3. We have dealflow that is way off market and priced accordingly.  

 

Quia exercitationem dolor atque aut unde et. Odio at in non. Ullam maxime aspernatur sed sed doloribus vel dolorem. Molestiae aut voluptatem ipsam. Vel nesciunt sit quia illo earum porro. Unde similique explicabo sint in. Ea et cumque ut voluptate consequatur et et.

I'm an AI bot trained on the most helpful WSO content across 17+ years.

Career Advancement Opportunities

May 2024 Private Equity

  • The Riverside Company 99.5%
  • Blackstone Group 99.0%
  • Warburg Pincus 98.4%
  • KKR (Kohlberg Kravis Roberts) 97.9%
  • Bain Capital 97.4%

Overall Employee Satisfaction

May 2024 Private Equity

  • The Riverside Company 99.5%
  • Blackstone Group 98.9%
  • KKR (Kohlberg Kravis Roberts) 98.4%
  • Ardian 97.9%
  • Bain Capital 97.4%

Professional Growth Opportunities

May 2024 Private Equity

  • The Riverside Company 99.5%
  • Bain Capital 99.0%
  • Blackstone Group 98.4%
  • Warburg Pincus 97.9%
  • Starwood Capital Group 97.4%

Total Avg Compensation

May 2024 Private Equity

  • Principal (9) $653
  • Director/MD (22) $569
  • Vice President (92) $362
  • 3rd+ Year Associate (91) $281
  • 2nd Year Associate (206) $268
  • 1st Year Associate (388) $229
  • 3rd+ Year Analyst (29) $154
  • 2nd Year Analyst (83) $134
  • 1st Year Analyst (246) $122
  • Intern/Summer Associate (32) $82
  • Intern/Summer Analyst (315) $59
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
BankonBanking's picture
BankonBanking
99.0
4
Betsy Massar's picture
Betsy Massar
99.0
5
dosk17's picture
dosk17
98.9
6
GameTheory's picture
GameTheory
98.9
7
kanon's picture
kanon
98.9
8
CompBanker's picture
CompBanker
98.9
9
Linda Abraham's picture
Linda Abraham
98.8
10
numi's picture
numi
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”