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.  

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Aug 3, 2021 - 11:36am
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