Deal-by-Deal Private Equity in the Lower Middle Market

CapitalPad is available exclusively to accredited investors, subject to approval through our onboarding process.

Yes. Funds, family offices, and SBICs active in the independent sponsor space are welcome. Institutional investors commit a minimum of $750,000 per deal for direct deal flow access.

Institutional status can be designated during onboarding.

CapitalPad focuses on deal-by-deal co-investments in lower middle market acquisitions, a segment where pricing remains reasonable and institutional capital is less concentrated. Target transactions typically fall between $5M and $30M in enterprise value, with underlying companies generating $1M to $5M in EBITDA.

The deals we back fall into two categories:

Independent sponsor transactions. Independent sponsors are private equity professionals who source and close acquisitions deal-by-deal rather than managing a committed fund. They identify a specific company, sign an LOI, and raise acquisition capital for that transaction. The sponsor typically takes an active role operating the business after close.

Post-LOI search fund acquisitions. Search fund operators pursue a similar model on a smaller scale. They identify a single target, secure an LOI, and raise equity to complete the acquisition, then step into an operating role post-close.

The businesses being acquired share consistent traits: multi-year operating histories, non-discretionary demand, healthy margins, and minimal cyclicality. Most fall within home services, professional services, healthcare services, light manufacturing, or essential B2B operations. These are mature operating companies, not startups, turnarounds, or venture-style growth plays.

In a traditional private equity fund, investors lock up capital at the start of the fund’s life and give the manager discretion to allocate it across deals over the following years. CapitalPad operates under a different model. Every acquisition is evaluated independently, and investors choose deal by deal whether to participate. There are no blind pools, no scheduled capital calls, and no recurring management fee.

There is no fixed posting schedule. New opportunities appear only after clearing our underwriting review, which fewer than 5% of prospective deals pass. In practice, most months bring one to two vetted transactions, but the pace is driven entirely by what clears diligence, not by a target cadence.

Once approved, investors log into the CapitalPad dashboard and see each new opportunity as it is posted. Every deal arrives with a full diligence package: the investment memo, sponsor background, deal structure and investor terms, underlying financials, and a recorded sponsor interview. From there, investors work through the materials at their own pace, submit questions to the deal team, and request an allocation when they want to participate.
All co-investors in a given deal are consolidated into a single SPV. That keeps the cap table simple for the sponsor and the participation process straightforward for investors.

Most investments are held for 3 to 7 years, though this varies by deal. Investors may receive cash distributions during the hold period, but a significant portion of returns is typically realized at exit.

CapitalPad charges a single 1.5% administration fee at the time each investment is made. There is no annual management fee.

The traditional “2 and 20” private equity model pairs carried interest with a 2% annual fee that managers collect regardless of whether the fund performs. CapitalPad carries no annual fee. We earn 20% of profits, but only after each investor has received their full initial capital back on a given deal. Terms for institutional partners are structured separately.

Every private equity investment carries risk, and no return is guaranteed. CapitalPad focuses on established, profitable companies with durable operating models, but individual outcomes still vary. If a portfolio company underperforms, distributions can be reduced, delayed, or suspended entirely. In the worst case, a business failure can result in a complete loss of invested capital. These are also illiquid holdings. Capital may be committed for several years, and no secondary market exists to exit early.

CapitalPad does not provide personalized investment advice or recommendations to any individual investor. All information provided through this website, including details related to potential investment opportunities, is for informational purposes only and is not provided by CapitalPad.

Investors acknowledge and accept the inherent risks of investing in private securities, including the risk of total loss of invested capital. Past performance of any entity, individual, or investment strategy is not indicative of, and does not guarantee, future results. Any forward-looking statements or projections are hypothetical, may not materialize, and should not be relied upon as a guarantee of future performance.

Investors are solely responsible for conducting their own independent due diligence prior to making any investment decision. Investments made through CapitalPad are speculative, illiquid, not FDIC insured, not bank guaranteed, and may lose value. There may be no secondary market for these securities.

Investments may also involve limited or no voting rights, and investors should assume that they will not have influence over the management or operations of the underlying entity.

By participating, investors acknowledge that all investments involve significant risk, and that neither CapitalPad nor its affiliates make any representation, warranty, or guarantee as to the performance of any investment.