As a GP in a rollup, what should I negotiate with my investors?
Dear all,
I’m working on a buildup project in a quite fragmented healthcare niche.
Our goal is to acquire 60 companies in 5yr.
After several negotiations we decided to raise funds using the classical 80/20 carried Interest model.
We will raise a first round of $20M at nominal value so dilutive effects will be massive (Founders will invest a mere 2% of the round).
I’m not very familiar with this model (I’ve always raised funds on VC model) and from what we’re negotiating Founders/GP will get:
- annual salary @market value
- 20% of profits distributed according the American waterfall model
I was wondering if this is the best we can get out of the deal or if it would be smarter to negotiate for something additional like stock options, fees for each acquisition, etc.
I’d really love to know your opinions and what has worked in your experience.
many thanks
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