Equity relationships on smaller deals
For those of you that work in the space of smaller deals where equity checks are only $2-3 million at most, where or who are you typically partnering with? (family offices, high-net worth individuals, asset managers, etc.?)
And how did you form those relationships?
A few years ago I worked for a small, regional group that had a few insurance companies that wrote checks in the $2-$8M range. From what I gathered, it took several years to develop the level of trust they required to sign on.
As far as relationship forming is concerned, it's often a mix of cold calling, networking and serendipity.
It’s gonna mostly be HNW and sourced through networking / family friends from my rxperience
Yep, this is it. Unless you have the balance sheet (or have someone who has the balance sheet willing to back you) you're going to need to scrape the money together from Family/Friends/connections until you have the balance sheet or have developed enough of a track record that you can point to.
Hopefully we get more answers on this. I run a mortgage brokerage that focuses on small balance commercial/investment loans (sub $10mm)
Recently quite a few developers have approached me on raising equity. It's very difficult in the small balance equity world.
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