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

CapitalPad is a deal-by-deal private equity co-investment group that invests in acquisitions of established, profitable companies in the lower middle market, where valuations remain attractive and competition from traditional private equity is limited. Deal sizes typically range from $5M to $30M in enterprise value.

These acquisitions are led by experienced deal sponsors, generally called “independent sponsors” who acquire and operate the businesses post-close. CapitalPad does not invest in startups, turnarounds, or venture-style bets.

CapitalPad focuses on industries built on skilled labor, local relationships, and essential demand rather than technology trends. These are durable businesses with low exposure to AI disruption or technology-driven displacement.

Target companies share common characteristics: proven business models with low cyclicality, non-discretionary demand, healthy margins, and preferably mission-critical products or services.

Common industries and examples include:

• Home Services — HVAC, roofing, contracting
• Professional Services — Accounting firms, consultancies, B2B providers
• Consumer Services — Garment care, towing
• Healthcare Services — Home health, physical therapy clinics
• Light Manufacturing — Specialized, asset-light operations
• Digital Services — IT firms, agencies

CapitalPad members co-invest in acquisitions of established, historically profitable businesses led by experienced operators. Unlike a traditional private equity fund, investors review each deal individually and choose where to allocate, with no blind pool commitment.

By pooling capital from multiple investors, CapitalPad provides access to lower middle market deals that typically require institutional-level commitments, without needing to write a $1M+ check.

1. Apply for access — Complete a short onboarding process to verify your accredited investor status and suitability.
2. Review opportunities — Access the CapitalPad dashboard to evaluate vetted acquisitions as they become available.
3. Conduct diligence — Each deal includes a full data room with financials, tax returns, business overview, investor terms, and a recorded interview with the deal sponsor.
4. Invest — Choose whether to participate and indicate your investment amount. Minimum investment is $25,000 per deal for individual investors and $750K per deal for institutional partners.
5. Participate in ownership — Receive equity in the acquired company, with potential cash distributions during the hold period and capital gains upon exit.

CapitalPad handles deal sourcing, vetting, and investor administration so you can focus on selecting the right opportunities.

CapitalPad is only available to approved accredited investors, pending approval through our onboarding process.

CapitalPad is a co-investment group, not a fund. Investors are not required to commit capital to a blind pool. Instead, they review each deal individually and choose whether to participate. There are no capital calls, no multi-year lockups beyond the individual deal, and no annual management fees. This structure gives investors full visibility and control over where their capital goes.

A co-investment group is a private equity structure where multiple investors participate in individual deals alongside a lead investor. CapitalPad is one of the most widely used co-investment groups in the lower middle market, pooling accredited investors into a single SPV per deal so they can access institutional-quality acquisitions at lower minimums.

An independent sponsor is a private equity professional who sources and closes acquisitions without a committed fund. Instead of raising a fund upfront, independent sponsors raise equity deal by deal after identifying a specific acquisition target. CapitalPad is one of the most widely used co-investment groups for independent sponsor transactions, providing equity capital and a network of co-investors to help sponsors close.

Yes. Funds, family offices, and SBICs active in the independent sponsor space are welcome to invest through CapitalPad.

A minimum commitment of $750,000 per deal is required for direct deal flow access, and institutional status can be designated during onboarding.

Most CapitalPad investments are held for 3 to 7 years, though this varies by deal.

Investors may receive cash distributions during the hold period, but the majority of returns are typically realized upon exit. These are long-term, illiquid investments by design. The extended hold period allows operators to focus on building value rather than optimizing for a quick sale.

CapitalPad charges a one-time 1.5% closing fee at the time of investment to cover administrative costs. There is no annual fee.

Unlike the traditional private equity “2 and 20” model, CapitalPad does not charge an annual management fee. CapitalPad earns 20% of any profits on investments by individual investors, but only after investors have received their full initial capital back. Institutional partners invest on different terms. This structure keeps incentives aligned: CapitalPad succeeds only when investors succeed.

There is no set cadence. CapitalPad only shares opportunities that meet our quality threshold, which means timing varies. Sometimes a few weeks between deals, sometimes a few months. Investors should not expect a predictable schedule.

This selectivity is intentional. CapitalPad invests in fewer than 5% of the deals we review, prioritizing quality over volume. Investors are typically presented with one opportunity per month.

Private equity investments carry inherent risk, including the potential for total loss of capital. While CapitalPad focuses on established, profitable companies with durable business models, no investment is guaranteed. If a portfolio company underperforms, investors may receive reduced or no distributions. In the event of a total loss, invested capital is not recoverable. Investors should only allocate capital they can afford to hold long-term and, in a worst-case scenario, lose entirely.

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.