Join 1,200+ investors reviewing deals
Join 1,200+ investors
CapitalPad is one of the most widely used co-investment groups for self-funded search acquisitions in the lower middle market. We review hundreds of searcher deals annually and invest in fewer than 5% of what we see.
CapitalPad invests $500K to $2M in self-funded search transactions. We understand SBA deal structures, move fast on commitment decisions, and pool all co-investors into a single SPV. No cost to searchers.
CapitalPad for Investors
Accredited investors use CapitalPad to review and co-invest in self-funded search fund deals in the lower middle market
We invest alongside experienced operators acquiring established, historically profitable businesses, and only after each deal clears our underwriting process.
Build a diversified portfolio of owner-operated businesses, one deal at a time.
CapitalPad reviews hundreds of self-funded search fund deals annually and invests in fewer than 5%. Every deal presented to investors has passed underwriting for business quality, operator capability, and deal economics.
The businesses behind self-funded search deals are established, profitable, and built on essential demand. These are companies with real operating history and repeat customers, not venture-style bets.
Self-funded search deal flow is fragmented and relationship-driven, often limited to SBA lender networks and small investor circles. CapitalPad gives accredited investors direct access curated deal flow.
CapitalPad invests directly in self-funded search transactions. We understand SBA deal structures, equity injection requirements, and what your lender needs to see on the cap table, so you get a capital partner who can move at the pace your deal requires.
All co-investors are pooled into a single entity. You close with one counterparty and one wire. No coordinating with individual investors, no separate legal docs, and no delays at the closing table.
Self-funded searchers never pay a fee to work with CapitalPad. We earn carry from our investors only when the deal performs.
CapitalPad for Searchers
CapitalPad invests $500K to $2M in self-funded search acquisitions at the post-LOI stage. All co-investors are pooled into a single SPV that your SBA lender can underwrite cleanly.
We work with self-funded searchers across a range of deal sizes and structures. Whether you need gap equity to meet your SBA injection requirement or a co-investment partner to anchor the raise, CapitalPad can move from review to commitment on your lender’s timeline.
There is no cost to searchers at any stage. CapitalPad earns carry from its investors only when the deal performs.
CapitalPad for Investors
“CapitalPad makes the deal sourcing and logistics of SMB investing easy – I’ve already joined my first deal and am excited for more”
CapitalPad for Investors
CapitalPad for Searchers
“CapitalPad’s investment was invaluable for helping close our SMB deal. Highly recommended for searchers.”
CapitalPad for Searchers
“CapitalPad’s investment was invaluable for helping close our SMB deal. Highly recommended for searchers.”
Our team has direct experience acquiring and operating businesses through entrepreneurship through acquisition. We’ve worked through SBA closings, managed post-acquisition transitions, and understand what the first year of ownership looks like from the inside.
Deal-by-deal access to vetted self-funded search acquisitions in the lower middle market. Review each deal individually with full diligence materials before committing capital.
Raise acquisition equity from a co-investment group that understands self-funded deals. CapitalPad invests at the post-LOI stage, pools your investors into a single SPV, and keeps your cap table clean for your lender.
An active and growing portfolio of self-funded search acquisitions across home services, healthcare, consumer services, business services, and light manufacturing.
We wanted to build a passive portfolio of owner-operated businesses and found the process broken. Deal flow was scattered, diligence was inconsistent, and there was no efficient way for investors like us to participate. CapitalPad exists to fix that for both sides: investors get curated deal flow, and searchers get a faster path to closing.
$25,000 per deal for individual accredited investors.
$25,000 per deal for individual accredited investors.
Investing in self-funded search deals through CapitalPad works in a few steps. Once your account is approved, you access the CapitalPad dashboard. Each deal is posted only after clearing our underwriting process and includes a complete diligence package:
You review the materials and decide whether to co-invest alongside the searcher. If you proceed, you indicate your commitment size in the dashboard. As the deal approaches closing, CapitalPad collects the committed capital and issues subscription documents for signature. The minimum commitment is $25,000 per deal for accredited investors.
No. These are long-term, illiquid investments, typically held for 3 to 7 years. You may receive distributions during the hold period, but most returns are realized when the company is sold. The longer hold period reflects the SBA loan repayment timeline and gives operators time to grow and professionalize the business.
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 also earns 20% of profits, but only after investors have received their full initial capital back. This structure ensures CapitalPad only earns meaningful returns when investors do.
Self-funded search is a path to entrepreneurship through acquisition where the searcher finances their own search process, covering living expenses, deal sourcing, and diligence costs personally, before raising investor capital to close a transaction. The model has grown significantly as an alternative to traditional search funds, offering searchers greater flexibility and control over their search timeline and target criteria.
Self-funded searchers typically raise acquisition capital only after identifying a target company and signing an LOI. CapitalPad is there to support searchers during this phase, as it is one of the top self-funded search fund investors in this asset class, investing $500k to $2M in each self-funded search transaction.
Self-Funded Search vs Traditional Search Funds
Unlike traditional search funds, where investors provide capital from day one to cover salary and search expenses, self-funded searchers bear those costs themselves. This means more personal financial risk upfront, but also more equity ownership and fewer investor obligations during the search period.
Self-funded searchers also typically utilize SBA loans as a primary source of debt financing, while traditional search funds generally use conventional lending sources suited to larger transaction sizes.
Self-Funded Search vs Independent Sponsors
Self-funded searchers differ from independent sponsors, who are usually former private equity professionals or senior executives pursuing larger, institutional-quality deals, often $5M+ EBITDA. Self-funded searchers generally target smaller companies in the $1M to $3M EBITDA range and focus on owner-operator transitions where they will actively run the business post-close. CapitalPad is an active investor in self-funded search, search fund, and independent sponsor transactions across the United States.
Self-funded search is a model of Entrepreneurship Through Acquisition (ETA) in which an entrepreneur finances the search process out of pocket rather than raising search capital from investors upfront. The searcher identifies and evaluates target companies on their own timeline and at their own expense, then raises equity from investors only after signing a letter of intent (LOI) on a specific acquisition.
This differs from the traditional search fund model, where investors fund 18 to 24 months of search activity before any company has been identified. In a self-funded search, the entrepreneur bears the full cost and risk of the search period but retains significantly more equity in the acquired business, typically 60% to 80%+ compared to 10% to 25% in a traditional search fund.
The self-funded search model has grown substantially as more entrepreneurs recognize the appeal of majority ownership and operational autonomy. The model is particularly popular with mid-career professionals, military veterans, and operators outside the traditional MBA pipeline who bring direct industry or management experience to the acquisition.
The capital structure of a self-funded search acquisition typically involves three components: senior debt, investor equity, and seller financing.
SBA 7(a) loans are the primary source of debt financing for self-funded search deals. The government-backed SBA 7(a) loans can cover 50% to 80% of the total acquisition price, with terms up to 10 years. The searcher is required to personally guarantee the loan and contribute a minimum 10% equity injection. Live Oak Bank and Huntington Bank are among the most active SBA lenders in the self-funded search space.
Investor equity typically makes up 10% to 30% of the total deal value. Because the searcher has already funded the search process personally, investors are entering at the post-LOI stage with a specific business to evaluate. This means less blind risk than traditional search fund investing, but also a smaller equity stake relative to the searcher’s majority ownership.
Seller financing in the form of a seller note often fills the remaining gap, typically 10% to 20% of the purchase price. Seller notes serve as alignment between buyer and seller, giving the seller confidence in the transition while deferring part of the purchase price. Under the SBA’s June 2025 lending guidelines (SOP 50 10 8), seller notes must be on full standby for the entire SBA loan term to count toward the equity injection requirement.
Total enterprise values for self-funded search acquisitions typically range from $1M to $10M, with most deals falling between $2M and $7M. Target company EBITDA generally ranges from $500K to $2.5M.
Self-funded searchers target established, historically profitable businesses with characteristics that support significant debt service while generating free cash flow for the owner-operator:
These are businesses built on skilled labor, local customer relationships, and essential demand. Many are founder-owned companies where the owner is approaching retirement with no succession plan, creating a natural CEO succession opportunity. The baby boomer retirement wave is estimated to affect over 2.3 million small businesses nationwide, creating a deep and growing pool of acquisition targets for self-funded searchers.
Unlike traditional search funds that may target technology-enabled services or higher-growth profiles, self-funded searchers generally focus on businesses with predictable, repeat-customer revenue and low exposure to technology disruption. The thesis is cash flow and durability, not growth at all costs.
The investor economics in self-funded search differ meaningfully from traditional search funds. Because the searcher retains majority ownership, investors receive a smaller equity stake but invest at lower valuations with less capital at risk per deal.
Typical investor terms in self-funded search acquisitions include:
The Search Investment Group (SIG) published the first dedicated self-funded search investing study in 2023, covering 279 respondents and 109 completed acquisitions. The data showed median investor IRRs of 25% to 30% with a capital loss rate of just 5%, a significantly lower loss rate than traditional search funds. The lower loss rate is partly attributed to the conservative capital structures (heavy SBA debt, lower entry multiples) and the searcher’s personal financial commitment through the personal guarantee.
For context, the Stanford GSB 2024 Search Fund Study reported aggregate IRRs of 35.1% and a 4.5x MOIC for traditional search funds, though with wider return dispersion and a 31% loss rate on acquired companies. The two models offer different risk-return profiles.
As always, but especially here, past results do not guarantee future performance. That is frequently used as a casual disclaimer, but it is very meaningful here as searcher landscapes can change and the data will not catch up until after the fact.
The two models share a common origin in the search fund concept developed at Stanford Graduate School of Business by Professor H. Irving Grousbeck and later taught at Harvard Business School by Rick Ruback and Royce Yudkoff. But the structures, economics, and investor profiles differ significantly:
Both models target established, historically profitable businesses with durable demand and limited technology disruption risk. The choice between models depends on the entrepreneur’s risk tolerance, career stage, and desired level of operational control, and on the investor’s preferences for equity stake, governance rights, and return profile.
Self-funded searchers and independent sponsors both raise equity on a deal-by-deal basis at the post-LOI stage, but they operate at different ends of the lower middle market.
Independent sponsors are typically experienced private equity professionals or corporate executives pursuing deals with $2M to $10M+ in EBITDA and enterprise values of $10M to $50M+. They often structure deals with institutional promote economics (20% to 30% carry) and may or may not step into a full-time operating role.
Self-funded searchers generally target smaller businesses ($500K to $2.5M EBITDA), take on the CEO role directly, retain majority equity ownership, and finance acquisitions primarily through SBA 7(a) loans with a personal guarantee. The self-funded model is often a first-time acquisition for the operator, while independent sponsors frequently pursue multiple transactions over the course of their careers.
CapitalPad is an active investor in both self-funded search deals and independent sponsor transactions across the lower middle market.
The self-funded search community has its own set of dedicated events alongside the broader ETA conference circuit:
For investors looking to access self-funded search deal flow and for searchers seeking capital partners, these events are among the most efficient ways to build relationships in the self-funded search community.
Self-funded search deal flow is more fragmented and harder to access than traditional search fund investing. Traditional search funds have an established ecosystem of institutional investors, many of whom are Stanford GSB or Harvard Business School alumni. Self-funded deals, by contrast, are typically raised through the searcher’s personal network in the weeks leading up to close, making them largely invisible to investors without direct connections.
There are three primary paths into self-funded search investing:
Direct relationships with searchers. Many self-funded search investors build deal flow by attending ETA conferences, participating in online communities like Searchfunder, and networking with SBA lenders who see deal flow early. This approach takes time but gives investors the most control over deal selection.
Dedicated self-funded search investors. A small but growing number of firms specialize in self-funded search. These firms invest their own capital alongside searchers and may offer co-investment opportunities to their networks.
Co-investment groups. CapitalPad is one of the most widely used co-investment groups for self-funded search acquisitions in the lower middle market. We invest at the post-LOI stage, after the searcher has identified a target company and signed a letter of intent. Our investors review full diligence packages for specific businesses before committing capital. CapitalPad does not provide seed funding for the search phase. Individual investors are pooled into a single SPV per deal, with minimums starting at $25K.
For investors new to self-funded search, the Search Investment Group (SIG) Self-Funded Search Study, the Stanford GSB Search Fund Study, and HBR Guide to Buying a Small Business by Rick Ruback and Royce Yudkoff are the essential starting resources.
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.
CapitalPad invests at the post-LOI acquisition stage, backing self-funded searchers and acquisition entrepreneurs who have identified and negotiated a deal with an established, historically profitable business. We typically look for companies with at least $750K to $3M in EBITDA, which is the core range for self-funded search acquisitions. You’ll need an executed LOI, a realistic path to close, and a strong operator background. We focus on businesses with predictable, repeat-customer revenue, essential demand, and low customer concentration.
No. Self-funded searchers never pay a fee to raise capital through CapitalPad. We earn carried interest from investors only when the deal performs, keeping our incentives fully aligned with yours.
We focus on established, historically profitable businesses with durable demand and low exposure to technology disruption across the United States and Canada. Common sectors include home services, healthcare services, B2B providers, light manufacturing, commercial cleaning, and professional services. We do not invest in speculative startups, turnarounds, or businesses with high cyclicality.
We can provide an initial signal within days and formally commit capital in as little as two weeks. More lead time typically allows for a larger allocation. If your timeline allows, 30+ days is ideal.
That’s entirely up to you. Some searchers want an active partner who can help with strategy, hiring, or operations. Others prefer a passive co-investor. We follow your lead. Our team has direct experience in private equity and business operations and understands the specific challenges self-funded operators face in the first year after acquisition.