CapitalPad FAQ

CapitalPad is a private equity co-investment group for accredited investors seeking deal-by-deal access to private equity investments in the lower middle market.

CapitalPad focuses on investing in independent sponsor transactions, primarily acquisitions of established, historically profitable operating companies in durable industries. These are typically mature businesses with operating history, real customers, recurring or repeat demand, and understandable economics.

CapitalPad also selectively reviews post-LOI search fund transactions that fit a similar profile.

CapitalPad is built for two primary groups.

For accredited investors, CapitalPad provides access to private investment opportunities tied to selected lower middle market acquisitions, one deal at a time. Investors review individual opportunities and choose whether to request an allocation through a deal-specific SPV.

For independent sponsors and select search fund operators, CapitalPad can participate as an equity investor in qualified acquisitions, typically through a single CapitalPad investment vehicle.

No. CapitalPad is not a blind-pool private equity fund.

Traditional private equity funds generally require investors to commit capital upfront and give the fund manager discretion to deploy that capital across future deals. CapitalPad is deal by deal. Investors review specific acquisitions and choose whether to participate in each opportunity.

There is no blind-pool commitment, no scheduled capital calls, and no annual management fee.

No. CapitalPad is not equity crowdfunding, retail crowdfunding, or a public investment marketplace.

CapitalPad is a private equity co-investment group for accredited investors. Opportunities are reviewed before being presented to investors, and each investment is made through a private deal-specific vehicle.

CapitalPad focuses on investing in lower middle market private equity transactions, primarily acquisitions led by independent sponsors. The underlying companies are typically mature operating businesses with operating history, historical profitability, durable demand, healthy margins, and understandable business models.

Relevant sectors often include residential and commercial trades, professional and business services, healthcare and healthcare business services, testing and compliance, facilities and environmental services, specialty distribution, auto and fleet services, light industrial and niche manufacturing, logistics, equipment rental, and route-based services.

CapitalPad does not focus on startups, turnarounds, distressed assets, or venture-style growth companies pursuing unproven models. The focus is on practical private equity investments in operating companies, not speculative concepts.

CapitalPad does not provide personalized investment advice, financial planning, tax advice, legal advice, or wealth management services.

CapitalPad is also not a lender, debt provider, crowdfunding platform, or placement agent. CapitalPad does not fund startups, pre-LOI search costs, real estate developments, distressed turnarounds, or speculative growth companies.

CapitalPad is available to accredited investors, subject to onboarding and approval. Accredited investor eligibility is determined under U.S. securities laws and is confirmed during onboarding or before participation in an offering.

Becoming an approved investor does not require investing in any particular deal.

Minimums generally start at $25,000 per deal for individual accredited investors.

Minimums may vary by transaction and are disclosed before subscription.

Yes. Funds, family offices, SBICs, and other institutional investors may apply to participate through CapitalPad.

Institutional access, minimums, and terms are handled separately during onboarding.

Yes. CapitalPad can generally support investments through certain self-directed IRAs, IRA LLCs, checkbook IRA structures, solo 401(k)s, trusts, and investment entities, subject to onboarding and the requirements of the applicable custodian or plan administrator.

Investors using an IRA or other retirement account are responsible for confirming that the account is permitted to invest in private securities or LLC interests, that the investment does not create a prohibited transaction, and that they understand any tax considerations, including potential UBTI or UBIT issues.

CapitalPad can coordinate documentation with an investor’s custodian, but CapitalPad does not provide tax, legal, or retirement-account advice. Investors should consult their own advisers before investing through a retirement account.

Yes. Investors may be able to invest through an individual account, trust, LLC, partnership, or other entity, subject to onboarding, verification, and deal-specific subscription requirements.

The investing entity must satisfy the applicable investor eligibility requirements for the offering.

Non-U.S. investors may be able to participate in many deals, subject to onboarding, tax documentation, securities-law restrictions, and deal-specific requirements. Onboarding typically requires the appropriate tax forms, such as a W-8BEN or W-8BEN-E.

One important exception: deals financed with an SBA loan are restricted to U.S. persons and are not available to non-U.S. investors. Eligibility otherwise varies by jurisdiction and by transaction. Non-U.S. investors should consult their own legal and tax advisers before investing in U.S. private securities or partnership structures.

CapitalPad focuses on deal-by-deal private equity investments in lower middle market acquisitions, typically involving established private companies with operating history, historical profitability, and understandable business models.

Most opportunities are acquisitions led by independent sponsors, with select post-LOI search fund transactions that fit a similar profile. Target transactions generally fall between $5M and $30M of enterprise value, with underlying companies typically generating $1M to $7M of EBITDA.

CapitalPad generally prefers mature operating companies with durable demand, healthy margins, and practical value-creation opportunities, not startups, turnarounds, distressed assets, or venture-style growth plays.

Lower middle market acquisitions are typically built for larger checks from funds, family offices, SBICs, and private investor groups.

Individual investors are often blocked not by interest, but by access, minimums, allocation size, and closing logistics. CapitalPad organizes investor capital through a single deal-specific investment vehicle, allowing individual investors to participate while sponsors work with one CapitalPad investment party.

Traditional private equity funds generally require investors to commit capital to a blind pool, giving the manager discretion to invest across future deals.

CapitalPad is deal by deal. Investors review specific acquisitions and choose whether to participate in each opportunity. There is no blind-pool commitment, no scheduled capital calls, and no annual management fee.

Investors typically begin with a blinded overview of a potential transaction. To review full materials, investors sign a deal-specific NDA.

For each opportunity, the deal package may include information about the company, sponsor, transaction structure, investor terms, available diligence materials, key risks, and expected timeline. Investors decide deal by deal whether to request an allocation and, if they participate, invest through a deal-specific SPV.

Approved investors review opportunities in their CapitalPad investor dashboard, ask questions, and decide whether to request an allocation.

If an allocation is confirmed, the investor completes subscription documents and funds through a deal-specific SPV. CapitalPad coordinates the investor process, closing logistics, ongoing reporting, distributions, and annual tax documents.

An SPV, or special purpose vehicle, is a legal entity formed for a specific investment.

CapitalPad uses a separate SPV for each transaction. Participating investors invest in the SPV, and the SPV holds the investment in the underlying deal. This structure allows investors to participate through one organized vehicle while the sponsor works with a single CapitalPad investment party. SPV administration is handled through Canopy.

Allocations depend on the size of the CapitalPad participation, investor demand, transaction timing, and deal-specific constraints.

Requesting an allocation does not guarantee that the full requested amount will be available. Allocation procedures and deadlines are communicated for each opportunity.

There is no fixed posting schedule. New opportunities are shared only when they clear CapitalPad’s review process and fit the firm’s criteria.

Some months may have no new deals. Other periods may have multiple opportunities. The pace is driven by deal quality, not by a target cadence.

If a transaction does not close after investors have funded, investor capital is returned according to the terms of the applicable offering documents and escrow or SPV procedures. In practice, this means funds are returned in full, without fees.

Deal-specific details are provided in the transaction materials.

Most investments are expected to be held for several years, often in the range of 3 to 7 years, depending on the transaction and sponsor strategy.

Investors may receive distributions during the hold period, but returns are not guaranteed and a significant portion of any return may depend on a future exit.

Returns vary by deal.

Some investments may generate cash distributions from operating cash flow during the hold period. Others may reinvest earnings into growth, add-on acquisitions, debt reduction, or operational improvements, with most returns realized through a recapitalization or sale.

The expected return profile and distribution approach are disclosed in the deal materials for each transaction.

CapitalPad primarily reviews acquisitions led by independent sponsors of established, profitable lower middle market companies in the United States and Canada. Target transactions generally fall between $5M and $30M of enterprise value, with underlying companies typically generating $1M to $7M of EBITDA.

CapitalPad generally prefers mature operating businesses with proven business models, durable demand, healthy margins, and practical value-creation opportunities. Many fit within the broader generational ownership transition, where founder- or family-owned companies are moving to new operators.

CapitalPad does not focus on startups, turnarounds, distressed assets, or growth-stage companies pursuing unproven models.

The specific company matters more than the category, but CapitalPad generally focuses on sectors with recurring, repeat, essential, or compliance-driven demand.

Relevant sectors often include:

• Residential and commercial trades
• Professional and business services
• Healthcare and healthcare business services
• Testing, inspection, certification, and compliance
• Facilities and environmental services
• Specialty and value-added distribution
• Auto, fleet, and mobility services
• Light industrial and niche manufacturing
• Logistics, equipment rental, and route-based services

CapitalPad is less focused on businesses where the investment case depends primarily on speculative growth, heavy turnaround execution, or unproven market adoption.

CapitalPad focuses predominantly on acquisitions led by independent sponsors and selectively reviews post-LOI search fund or self-funded search acquisitions that meet a similar profile: an established operating company, historical profitability, clear buyer fit, appropriate structure, and a credible path to close.

CapitalPad does not fund pre-LOI search costs.

CapitalPad has supported acquisitions that use SBA financing, although independent sponsor transactions make up most of the active pipeline today. SBA-financed deals are generally restricted to U.S. persons, which may limit the investor pool. Sponsors should flag SBA financing early in the process.

CapitalPad primarily focuses on operating companies in the United States and Canada.

Opportunities outside those two countries are outside the current focus.

CapitalPad typically participates with $1M to $2.5M of equity in qualified transactions through a single CapitalPad investment vehicle. CapitalPad may consider smaller participations in select cases, depending on transaction size, structure, and overall fit.

Actual participation depends on transaction size, structure, timeline, diligence materials, investor economics, and overall fit with CapitalPad’s investment criteria.

Sponsors submit a transaction for review. If the opportunity appears to fit, CapitalPad evaluates the company, sponsor, transaction structure, investor economics, diligence materials, and path to close.

For opportunities that move forward, sponsors work with CapitalPad as one investment party through a single vehicle, one diligence process, one closing process, and one wire.

A strong submission generally includes:

• Signed LOI or transaction summary
• Deal teaser, CIM, or investment memo
• Sponsor background
• Target company overview
• Historical financials
• Financial model
• Sources and uses
• Debt financing plan
• Proposed investor terms
• Post-close value-creation plan
• Available diligence materials, including a Quality of Earnings report if available

Complete materials help CapitalPad provide a faster and more useful review.

Timing depends on deal complexity, sponsor responsiveness, and the completeness of the materials provided.

CapitalPad can generally provide an initial read on fit within a few business days after receiving core materials. A firmer commitment depends on diligence, documentation, investor process, and the transaction timeline.

Opportunities are initially presented to investors on a blinded basis. Investors who want to evaluate the full opportunity are required to sign a deal-specific NDA before receiving identifying information, full deal materials, or data room access.

Sponsors retain control over what is shared and when. Materials from transactions that do not move forward are treated as confidential and are not shared with investors.

No. Sponsors are not charged placement, advisory, success, closing, or participation fees by CapitalPad.

CapitalPad’s economics are borne by the CapitalPad investment vehicle and its investors, not by the sponsor.

CapitalPad generally participates on market-standard lower middle market terms and does not seek operational control.

CapitalPad typically expects customary minority investor protections, including information rights, quarterly reporting, approval rights on major decisions, tag-along rights, and other protections appropriate for the transaction structure.

No. CapitalPad invests equity only.

CapitalPad does not provide senior debt, mezzanine financing, SBA financing, or other lender products. Sponsors are responsible for arranging debt financing separately, although CapitalPad may make lender introductions for qualified sponsors where appropriate.

Participating investors are organized through a single CapitalPad investment vehicle.

The sponsor works with one CapitalPad investment party rather than managing individual investors directly. This helps keep the closing process, cap table, investor communications, and ongoing reporting more organized.

CapitalPad may decline a transaction because of size, structure, industry exposure, sponsor fit, investor economics, diligence gaps, timing, or overall fit with CapitalPad’s criteria.

Where appropriate, CapitalPad may provide feedback. Submission materials from transactions that do not move forward remain confidential.

CapitalPad is a passive minority investment partner after close. It does not manage the company or participate in day-to-day operations.

Sponsors are expected to provide quarterly reporting and comply with customary minority investor protections. Where helpful, CapitalPad may be available as a resource for strategic questions, follow-on capital, add-on acquisitions, service provider introductions, or exit planning.

CapitalPad charges a one-time 1.5% administration fee when an investment is made. There is no annual management fee.

CapitalPad also earns 20% carried interest on profits, but only after investors have received their initial capital back on that deal. Deal-specific fees and economics are disclosed before an investor subscribes.

Yes. Each investment is structured through its own deal-specific SPV, and investors should expect to receive one Schedule K-1 per investment per year.

K-1 timing depends on the underlying company, sponsor reporting, and SPV-level tax preparation. Investors should be prepared for K-1s to arrive later than standard brokerage tax forms. K-1s are issued through Canopy.

Investors can track active and historical investments in their CapitalPad investor dashboard. Deal documents, distributions, and tax documents, including K-1s, are made available through Canopy.

Distributions vary by transaction and are not guaranteed.

When a portfolio company or transaction generates distributable cash, distributions are made through the applicable SPV according to the governing documents for that investment and processed through Canopy.

No. CapitalPad does not provide personalized investment, legal, tax, accounting, financial, or other professional advice.

Information on the website and materials made available through CapitalPad are provided for informational purposes and should not be construed as a recommendation to purchase or sell any security.

CapitalPad investments are illiquid private securities. Investors should expect to hold for the full duration of each investment.

There may be no secondary market, and investors should not assume they will be able to sell or redeem their interest before an exit, recapitalization, or other liquidity event.

No. Past performance, projections, target returns, financial estimates, examples, and forward-looking statements are not guarantees of future results.

Any projections or targets are based on assumptions that may prove incorrect. Actual results may differ materially from expectations.

Investors should review all deal materials, offering documents, subscription agreements, operating agreements, risk factors, fees, conflicts, and tax considerations before investing.

Investors should also conduct their own independent diligence and consult their own financial, legal, tax, and accounting advisers.