How Many of You Are Pursuing Independent Sponsor Path?
Hi everyone -- seen some big threads on job search or net worth check. Also seen a few posts of people asking about search funds. Figured I'd start a thread for people to share their experience going the independent sponsor / search fund path.
I started down this path about 2 months ago. Doing everything self-funded. Looking at businesses around the $0.750-$1.250 million of SDE range and prioritizing businesses with high revenue quality over industry growth. I'm also going about my search with an industry focus and directly outreaching to business owners. So far, I've submitted one IOI.
It'd be interesting to see how many others are going down this path; whether they're going the self-funded route or not; and what's their overall strategy for their search
My main issue with that range is you're bidding against morons armed with cheap gov backed debt that will overpay for everything.
What do you mean? I am one of those morons bidding w/ cheap gov't backed debt :)
On a serious note, so far I haven't had to deal with a competing bidder cause I'm directly outreaching to these businesses. It seems I'm competing with the idea of (i) seller continues to operate the business, (ii) seller passes business onto children / #2 employee and / or (iii) asset sale
bump
Take this to Searchfunder .com. This forum is for real private equity professionals.
Currently doing a self-funded search after selling my first business I acquired. This path seems to have gotten incredibly saturated in the past year or two. More people searching and investors providing capital than there are good deals.
Nice! Yeah I heard that a lot of out-of-work PE professionals are out doing independent sponsor deals. However, not sure how many are actually putting in real work to pursue this path or just talking about it as something to say about what they're up to
what was your experience prior to buying the first business that you just sold? how / where did you find the capital from - what kind of investors are you referencing?
sorry if it's a dumb question, just haven't had experience with raising capital previously so i'm curious.
What capital are you using - savings from earlier in your career or did you raise capital?
Personal savings. I may be misguided but I'm building up my deal flow based on the industries I like, and then figuring out the financing side as a secondary step. I generally think if I find a good opportunity, the capital won't be that difficult to pull together
i haven't had too much exposure into capital raising, but curious what your approach would be to raise capital after finding good opportunities? are you planning to entirely self-fund from savings or is it to pitch to small family offices that you have contact with?
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