The Platform for Independent Sponsor Deals

Connecting independent sponsors with aligned investors

Connecting independent sponsors with aligned investors

Co-Invest in Sponsor Deals

Access curated independent sponsor opportunities in the lower middle market. CapitalPad evaluates hundreds of deals and surfaces only the most compelling transactions.

Fund Your Acquisition

CapitalPad invests $1M–$2.5M in independent sponsor transactions and brings a network of funds, family offices, and accredited investors to help you close.

CapitalPad for Investors

Invest in Curated Sponsor-Led Acquisitions

CapitalPad provides accredited investors access to curated independent sponsor-led acquisitions in the lower middle market. We focus on established, cash-flowing businesses led by experienced sponsors.

We’ve backed dozens of deals in sectors like home services, healthcare, and B2B, partnering with funds, family offices, and accredited investors dedicated to this asset class.

Rigorous deal selection. Aligned incentives. Simplified participation.

Disciplined Deal Selection

CapitalPad evaluates sponsor-led opportunities and approves only those that meet strict standards for profitability, durability, and operator quality.

Attractive Risk-Adjusted Returns

Independent sponsor deals have historically offered compelling outcomes relative to other private markets, with strong alignment between sponsors and investors.

Streamlined Participation

CapitalPad gives direct access to funds, family offices, and SBICs. Individual investors are pooled into an SPV, gaining the benefits of institutional investors at a lower entry point. 

Focused Capital

CapitalPad invests directly in independent sponsor deals, giving you a capital partner who understands your model and can move quickly.

Streamlined Closing

While larger funds go direct, smaller investors are pooled into a single entity. One partner, one wire, simplifying execution and reducing closing friction.

Aligned Incentives

Our incentives are directly tied to your success. Beyond capital, we bring deep private equity and operating expertise to help sponsors build enduring companies.

CapitalPad for Sponsors

Fund Your Acquisition with Confidence

CapitalPad invests $1M–$2.5M in equity for independent sponsor transactions.

We invest directly and bring a network of family offices, funds, and accredited investors focused exclusively on sponsor-led deals in the lower middle market.

We move quickly, make the process painless, and stay aligned with your success through close and beyond.

Streamline your raise. Fund your acquisition.

“CapitalPad was instrumental in helping close our transaction. They’ve remained excellent partners even after the close, leveraging their professional backgrounds to help modernize the business. Looking forward to working with the CapitalPad team in the months and years to come.”
Carlo Santelli
Cortina Capital Partners

Built on Experience

Built by a team with deep expertise in private equity and lower middle market transactions, CapitalPad combines institutional rigor with operational insight to support independent sponsor acquisitions.

For Investors

Access a curated pipeline of independent sponsor  opportunities in the lower middle market. Participate in a differentiated private equity strategy with confidence, clarity, and alignment.

For Sponsors

Close with certainty. CapitalPad invests directly in deals and brings a trusted network of investors to get your deal over the finish line.

Track Record

Our disciplined approach and sponsor-focused model have resulted in dozens of successfully closed transactions across industries and deal types.

FAQ

What are the requirements for independent sponsors on CapitalPad?

  • Typical target company size of at least $2M EBITDA
  • Must have a company under LOI (or in late-stage diligence)
  • Clear transaction path with a realistic closing timeline
  • Demonstrated track record of executing transactions (prior M&A, PE, or operating experience)
  • Sponsor economics (carry/promote, fee structure) that are market-standard and aligned with investors

Does CapitalPad charge sponsors a fee?

No. Raising capital through CapitalPad is free for sponsors. We only earn carry (from pooled investors) if the deal is successful, fully aligning our incentives with yours.

How quickly can CapitalPad commit capital?

CapitalPad can provide a signal within days and commit capital in as little as two weeks. However, the more time allowed, the larger the potential allocation. 30+ days is preferred.

What types of businesses does CapitalPad invest in?

We are industry-agnostic but focus on lower middle market businesses with durable demand, strong reoccurring revenue, low cyclicality, and clear profitability. We do not invest in speculative startups or distressed turnarounds.

What level of involvement does CapitalPad have post-close?

It’s driven by the sponsor. CapitalPad can be a hands-on partner in certain deals or a passive co-investor in others, depending on your preferences.

Who can invest on CapitalPad?

CapitalPad is open exclusively to accredited investors and institutions. All investors must complete our onboarding process for approval.

Can institutions invest through CapitalPad?

Yes. We actively work with funds, family offices, and SBICs who want access to independent sponsor opportunities. Institutional investors can designate their status during onboarding.

What is the minimum investment size?

$25,000 per deal for individual accredited investors. Institutions are typically expected to participate $750,000 or higher levels.

How do investors participate in deals?

Once approved, investors gain access to the CapitalPad dashboard. Opportunities are posted only when approved, and each includes a full diligence package with:

  • Deal memo & sponsor overview
  • Company description & financials (P&L, tax returns)
  • Investor model
  • Sources & uses
  • Investor terms (pref, IRR, step-up)
  • Value creation plan
  • Sponsor interview

Investors review the materials and choose to co-invest on a deal-by-deal basis.

How liquid are these investments?

Independent sponsor investments are long-term and illiquid. While investors may receive cash distributions during ownership, most returns are realized at exit when the company is sold.

How does CapitalPad make money?

CapitalPad is aligned with investors. CapitalPad charges a one-time (not annual) 1.5% management fee to help cover costs, and then only participates in the upside via a 20% carry (profit share).

Institutional investors allocating $750k or more do not pay a carry or management fee, as they invest directly.

The Independent Sponsor Model

The independent sponsor model is a deal-by-deal approach to private equity investing. Instead of managing a committed fund, independent sponsors identify attractive lower middle market companies, negotiate transactions, and then raise equity from investors for each deal individually. This structure offers flexibility to sponsors, who can pursue opportunities across industries and capital partners, while giving investors discretion to evaluate and commit to specific transactions rather than a blind pool.

sponsor model

Industry Overview

Independent sponsor–led acquisitions have become one of the most attractive and steadily growing segments of private equity. This model focuses on acquiring lower middle market companies.

The strategy emphasizes established, cash-flowing businesses with durable demand, recurring revenue, and proven profitability. Sponsors typically target companies with strong operating histories, low cyclicality, and limited risk of technological disruption—providing investors with exposure to stable industries rather than speculative ventures or distressed turnarounds.

Sectors commonly pursued include business and industrial services, healthcare, consumer services, light manufacturing, technology-enabled services, and professional services. These industries share characteristics of resilience, fragmentation, and long-term growth opportunities, making them well suited for the independent sponsor model.

Independent Sponsor Economics and Waterfall

According to the McGuideWoods Independent Sponsor Survey, the common economics in independent sponsor transactions are the following:

  • Preferred Return: Typically 8–10% for investors
  • Capital Return / Liquidation Preference: Investors generally receive a 1x return of capital before carry
  • Carry / Promote: Independent sponsors typically earn 20–30%, beginning after the preferred return is met; most deals use tiered promote structures based on MOIC or IRR hurdles
  • Management Fee: Around 5% of trailing twelve-month EBITDA, usually with defined salary floors ($100k–$399k) and caps ($500k–$999k)
  • Transaction / Closing Fee: 1–2.5% of enterprise value, most commonly around 2%, usually rolled into equity rather than paid in cash to incentivize alignment

Why CapitalPad?

CapitalPad provides independent sponsors with a trusted, aligned capital partner. CapitalPad’s approach combines deep transaction expertise with the flexibility to support sponsors at every stage of the acquisition.

CapitalPad is one of the top independent sponsor investors due to:

  • Specialized Experience – Extensive background in independent sponsor transactions and lower middle market acquisitions.
  • Speed & Certainty – Ability to evaluate and commit capital quickly, giving sponsors confidence in closing.
  • Flexible Capital Solutions – We invest directly and connect sponsors with family offices and institutional partners when larger checks are required.
  • Value-Add Partnership – Beyond capital, we offer hands-on support post-close to help scale the company and create long-term value.

Independent Sponsor vs. Search Fund

Independent sponsors operate without a committed pool of capital, raising equity from investors for each transaction once a company is identified. Search funds, by contrast, secure capital upfront from backers to cover the search process itself, typically committing to acquire a single business. This makes independent sponsors more flexible in pursuing multiple or larger transactions, while search funds are generally narrower in mandate and operator-driven.

Independent Sponsor vs. Self-Funded Searcher

Independent sponsors are usually former private equity professionals or corporate executives pursuing institutional-quality acquisitions with backing from family offices, funds, and accredited investors. Self-funded searchers, on the other hand, finance their own search expenses and often target smaller deals, leaning on personal savings and modest investor syndicates once an LOI is signed. Independent sponsors typically pursue larger, more complex deals with structured economics, while self-funded searchers focus on owner-operator transitions at a smaller scale.

CapitalPad does not provide personalized investment advice or recommendations. All information made available through this website, including materials related to potential investment opportunities, is for informational purposes only and is not authored or guaranteed by CapitalPad.

Investors acknowledge and accept the inherent risks of investing in private securities, including the risk of a 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 in nature, 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. 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.

Where Independent Sponsors & Capital Converge