May 16, 2023

Take Five #054: What you need to know about Working Capital in your acquisition, and more

Take Five #054: What you need to know about Working Capital in your acquisition, and more

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Take Five #054: What you need to know about Working Capital in your acquisition, and more

1. What’s an independent sponsor?

Ben provides a great overview of independent sponsors, and highlights 3 independent sponsors in Austin, TX:

An individual or capital group seeking to acquire a company, who raises equity capital on a deal-by-deal basis (sometimes called 'unfunded private equity firms' or 'fundless sponsor'). The people in this asset class tend to come from 'deal' backgrounds: finance, investment backing, private equity. Most independent sponsors target lower middle market companies in the $4M to $15M EBITDA range…

Read more on The SMB Scoop here.

2. Behind the scenes of an “SBA-PREQUALIFIED” deal… 🤔

3. Exploring major pitfalls in SBA closing with a lawyer

Scott Oliver sits down with Ray from The Art of SBA Lending to talk about all things legal with SBA Lending. Check out their latest episode on Youtube:

4. A great thread on the importance of Working Capital when buying a business

5. Things to consider with an earn out clause on your deal..

Considering an earn-out on your deal?

Earn-outs can be highly useful and mutually beneficial tools for both buyers and sellers under the right circumstances. However, without careful structuring and consideration, they can fraught with risk and unintended consequences.

Whether you’re using a earn-out to bridge a valuation gap, align the interests of the seller with your own, or defer a portion of the purchase price, your earn-out should be as thoughtful, analytical, and well-constructed as the rest of your offer.

Read more on considerations for your earn-outs from Mineola Search Partners here.