CapitalPad FAQ

CapitalPad is a private equity co-investment group that gives accredited investors deal-by-deal access to lower middle market acquisitions.

CapitalPad invests as a minority equity partner alongside independent sponsors acquiring established, historically profitable businesses. Investors evaluate each opportunity before committing capital and generally participate through a transaction-specific special purpose vehicle (SPV).

CapitalPad works with accredited individual investors, family offices, funds, and other eligible investors seeking exposure to individual private equity acquisitions.

CapitalPad also provides equity capital for independent sponsors acquiring lower middle market businesses.

CapitalPad focuses on independent sponsor acquisitions of established, historically profitable lower middle market businesses in the United States and Canada.

Representative industries include residential and commercial services, professional and business services, healthcare and provider services, testing and compliance, specialty distribution, auto and fleet services, and light industrial manufacturing.

The investment thesis builds on existing earnings and durable demand through operating improvements, organic growth, or complementary acquisitions. Startups, distressed businesses, major turnarounds, and real estate development are outside CapitalPad’s investment focus.

An independent sponsor is an investment professional or firm that identifies a business to acquire and raises capital for that specific transaction. After closing, the sponsor works with company management to execute the investment plan.

CapitalPad invests alongside independent sponsors as a minority equity partner. The sponsor leads the acquisition and operating plan; CapitalPad evaluates the opportunity and manages its own investor participation.

CapitalPad believes the lower middle market offers attractive opportunities to acquire established businesses at reasonable entry valuations and create value through a more clearly defined operating plan.

Professionalization can include stronger management, better financial reporting, disciplined pricing, and a repeatable sales process. CapitalPad evaluates how those improvements, expansion into new markets, or complementary acquisitions could increase earnings and strengthen the business.

CapitalPad prefers the independent sponsor model because the identified opportunity comes before the acquisition capital. Traditional private equity funds generally raise commitments against a strategy and deploy that capital within an investment period. Independent sponsors typically identify an acquisition before raising the capital to complete it.

CapitalPad believes this sequence supports selectivity and reduces pressure to deploy an existing pool of capital. Each transaction must attract investment on the merits of the business, acquisition price, financing, and operating plan.

CapitalPad lets accredited investors evaluate individual acquisitions before committing capital. Investors review the business, sponsor, acquisition price, financing, and proposed terms, then decide whether to participate.

A traditional blind-pool private equity fund generally raises commitments for a portfolio selected by the fund manager over time. CapitalPad investors participate through a dedicated vehicle for each acquisition, with no obligation to invest in subsequent deals and no annual CapitalPad management fee.

CapitalPad is led by founding partners Donza Worden and Travis Jamison. Donza brings institutional private equity experience, including investment roles at LaSalle Capital and NMS Capital. Travis brings experience founding, acquiring, and investing in businesses.

CapitalPad evaluates opportunities through a three-person investment committee, supported by a team across sourcing, operations, and investor support. Read about the CapitalPad team.

CapitalPad accepts accredited investors who complete its onboarding and verification process and meet the requirements of the applicable offering.

Completing onboarding provides access to review opportunities. It does not create an obligation to invest or guarantee an allocation in any transaction.

Individual investments through CapitalPad generally start at $25,000 per deal. Direct institutional participation starts at $750,000 per deal.

Applicable minimums and allocation terms are disclosed before investors subscribe.

CapitalPad works with funds, family offices, and Small Business Investment Companies (SBICs) that invest in independent sponsor transactions.

Direct institutional participation requires a minimum commitment of $750,000 per deal. Institutions can identify their investor type during onboarding so CapitalPad can discuss the appropriate participation structure.

CapitalPad supports investments through self-directed IRAs. Other retirement-account structures are reviewed subject to onboarding, the account’s governing rules, and custodian or plan-administrator requirements.

Investors should confirm that the account can hold the proposed investment and coordinate subscription documents and funding with the custodian. Private investments can raise prohibited-transaction and unrelated business taxable income (UBTI) considerations; using a retirement account does not make every investment tax-exempt.

CapitalPad permits eligible investors to participate through an LLC, trust, partnership, or other approved entity, subject to onboarding and the offering’s subscription requirements.

The investing entity is designated when requesting an allocation and must satisfy the applicable investor eligibility and documentation requirements.

Non-U.S. investors may be eligible for CapitalPad opportunities, depending on their jurisdiction, investor status, tax documentation, and the requirements of the transaction.

Prospective investors should contact CapitalPad during onboarding to confirm eligibility and any additional documentation required before requesting an allocation.

CapitalPad targets established lower middle market businesses with enterprise values of at least $5 million and annual EBITDA of at least $1 million.

These are minimum transaction criteria, not a fixed upper limit. CapitalPad considers business quality, sponsor experience, valuation, financing, and the investment plan alongside company size.

Lower middle market acquisitions often rely on sponsor relationships and equity commitments from family offices, funds, and other substantial investors.

CapitalPad organizes participating investors through a transaction-specific SPV. This allows accredited individuals to invest in selected acquisitions with commitments generally starting at $25,000, while the sponsor works directly with CapitalPad on its vehicle’s investment.

CapitalPad investors decide whether to participate in each acquisition. Joining CapitalPad or investing in one transaction does not create an obligation to invest in another.

Once an investor subscribes to a specific offering, the obligations in that investment’s governing documents apply.

Approved CapitalPad investors can review an initial overview of each available opportunity. Full investment materials are provided under an NDA.

The materials include the investment memo, sponsor background, company financials, acquisition structure, financing, proposed terms, operating plan, distribution waterfall, and key risks. Investors can also review a recorded sponsor interview and direct questions to the CapitalPad team before requesting an allocation.

Accredited investors can invest in lower middle market private equity through CapitalPad by reviewing individual acquisitions and participating through a dedicated SPV. The process has five steps:

1. Apply for access. Complete CapitalPad’s onboarding and accredited-investor verification process.
2. Review an opportunity. Read the initial overview and sign an NDA to access full investment materials.
3. Evaluate the investment. Review the company, sponsor, financials, financing, proposed terms, investment plan, and risks.
4. Request an allocation. Select the amount you wish to invest and designate the investing entity.
5. Complete documents and funding. Once an allocation is confirmed, sign the subscription documents and fund the investment.

Apply for investor access.

An SPV, or special purpose vehicle, is a legal entity formed for a specific investment. Investors participating through a CapitalPad SPV hold interests in that vehicle, which holds equity in the acquired business.

Each transaction has its own vehicle and governing documents. Investor rights, economics, distributions, and transfer restrictions are defined in those documents.

CapitalPad allocations depend on its investment amount in the transaction, investor demand, closing timing, and any deal-specific constraints.

Requesting an allocation does not guarantee acceptance or the full amount requested. CapitalPad communicates allocation procedures, confirmation, and funding deadlines for each opportunity.

CapitalPad makes opportunities available after approval by its three-person investment committee. Availability depends on the quality of the business, sponsor, and transaction terms.

There is no fixed schedule. There may be periods when no new opportunities are available.

If a transaction does not close after investors have funded, investor capital is returned in full, without fees, under the applicable offering documents and escrow or SPV procedures.

The transaction materials describe the relevant funding and refund procedures.

CapitalPad investments generally target a holding period of 3 to 7 years, depending on the business and sponsor’s investment plan. The target is disclosed before investors commit.

Actual ownership periods may be shorter or longer. A target holding period is an estimate, not a fixed exit or repayment date. For broader market context, see our research on private equity holding periods.

Returns from CapitalPad investments may come from cash distributions during ownership, a recapitalization, or the eventual sale of the business.

Some companies distribute operating cash flow; others retain it for growth, acquisitions, or debt repayment. The timing and amount of distributions depend on business performance, financing obligations, reinvestment needs, and the investment terms.

CapitalPad’s three-person investment committee evaluates the business, sponsor, acquisition price, financing, and proposed investor terms.

The review includes earnings quality, cash conversion, customer concentration, capital expenditure requirements, leverage, and performance if the operating plan falls short. Committee approval allows an opportunity to proceed to investor review; each investor makes an independent participation decision.

Members of the CapitalPad team generally invest their own capital alongside participating investors, giving them financial exposure to the same underlying business.

CapitalPad also assesses alignment through sponsor compensation, ownership, governance, and the terms governing distributions. Co-investment does not eliminate investment risk or potential conflicts of interest.

Internal rate of return (IRR) measures annualized performance based on the amount and timing of investment cash flows. Multiple on invested capital (MOIC) compares total investment value with the capital invested, without accounting for how long the investment is held.

When reviewing a CapitalPad opportunity, distinguish gross transaction-level figures from net investor returns after applicable fees and carried interest. Targets depend on assumptions and are not guaranteed results.

CapitalPad invests in sponsor-led buyouts, recapitalizations, and buy-and-build strategies involving established, historically profitable lower middle market companies.

The target profile includes businesses with enterprise values of at least $5 million, annual EBITDA of at least $1 million, and operations in the United States or Canada. CapitalPad evaluates the business, transaction structure, sponsor experience, and investment plan together.

CapitalPad considers businesses supported by recurring or repeat purchases, essential services, or regulatory requirements. Representative industries include:

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

The list is representative. CapitalPad considers other industries when the business and transaction fit its investment criteria.

CapitalPad focuses on acquisitions of operating companies in the United States and Canada. Opportunities outside those countries are outside its current investment focus.

CapitalPad’s typical equity investment is $1 million to $2.5 million per transaction. This is CapitalPad’s aggregate participation, rather than an individual investor’s minimum commitment.

The final amount depends on diligence, transaction terms, and confirmed investor commitments. CapitalPad may consider smaller participations in select cases.

CapitalPad’s three-person investment committee reviews the business, sponsor, acquisition price, capital structure, proposed economics, and operating plan. Transactions that fit proceed to further diligence and review of investor terms.

Approved opportunities are made available to CapitalPad investors for deal-by-deal consideration. CapitalPad manages the investor commitment process and works directly with the sponsor on diligence, documentation, and funding.

CapitalPad’s initial review is most useful when the sponsor provides a clear transaction summary and the available supporting materials:

• Signed LOI or current transaction status
• Teaser, CIM, or investment memo
• Sponsor background and relevant experience
• Historical financial statements and financial model
• Purchase price, sources and uses, and equity requirement
• Debt financing plan
• Proposed investor terms and sponsor economics
• Management plan and value-creation thesis
• Expected closing date and key milestones
• Available diligence materials, including any Quality of Earnings report

Sponsors should identify which materials are complete and which remain in progress.

CapitalPad generally provides initial feedback on fit within two to three business days after receiving the core transaction materials.

Initial feedback is not a funding commitment. Further diligence, agreement on terms, investor commitments, and closing documentation determine the final funding timeline.

CapitalPad incorporates a mutual NDA into the transaction submission process. Opportunities approved for investor review are initially presented on a blinded basis.

The sponsor approves the initial release of identifying materials. Investors must sign an NDA before receiving full materials or data-room access. Materials from transactions CapitalPad does not pursue remain confidential.

CapitalPad does not charge independent sponsors placement, advisory, success, closing, or participation fees.

CapitalPad’s compensation is charged to its investment vehicle and participating investors, with the applicable economics disclosed before subscription.

CapitalPad invests as a minority equity co-investor. The independent sponsor leads the transaction and the post-close operating plan.

CapitalPad seeks customary minority investor protections and does not take board seats. Reporting, information rights, consent rights, and other protections are addressed in the transaction documents.

CapitalPad invests equity and does not provide senior debt, mezzanine debt, or other lending products.

Debt financing is arranged separately as part of the acquisition’s capital structure.

Investors participating through CapitalPad’s SPV are organized into one transaction-specific investment vehicle. CapitalPad manages their subscriptions, funding, and investor communications.

For that vehicle, the sponsor works with one CapitalPad investment party and receives one wire at closing. The sponsor does not need to administer each SPV investor separately.

CapitalPad may decline a transaction because of business quality, valuation, leverage, investor terms, sponsor fit, diligence findings, timing, or other investment criteria.

CapitalPad may provide feedback where useful. Submission materials remain confidential when a transaction does not proceed.

CapitalPad remains engaged as a minority equity partner and expects quarterly reporting. The sponsor and company management remain responsible for day-to-day operations and execution of the investment plan.

CapitalPad coordinates its investor communications and administration. Where useful, CapitalPad can provide strategic input, service-provider introductions, and perspective on add-on acquisitions, financing, and exit planning.

CapitalPad generally reviews transactions under LOI or in advanced diligence. Sponsors should be able to explain the business, investment thesis, proposed structure, equity requirement, and expected closing date.

Relationships can begin earlier, but a specific acquisition and supporting materials are needed for transaction review.

Independent sponsors can submit a transaction to CapitalPad with an overview of the business, sponsor, proposed acquisition, equity requirement, and timing. A mutual NDA is incorporated into the submission process.

CapitalPad’s independent sponsor overview describes the investment profile and review process.

CapitalPad reviews proposed acquisition and management fees, preferred returns, sponsor equity, and carried interest or promote as part of the transaction’s overall economics.

The emphasis is on market-standard independent sponsor terms that align incentives with investor outcomes. CapitalPad considers those terms in the context of the business, acquisition price, financing, and operating plan.

CapitalPad confirms its allocation once participating investor commitments are finalized. Investment committee approval allows a transaction to proceed to investor review; it does not by itself guarantee funding.

CapitalPad keeps the sponsor informed of allocation progress and communicates changes affecting the expected investment amount or funding timeline.

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

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

Investors participating through CapitalPad’s SPVs receive an annual Schedule K-1 for each investment. The K-1 reports the investor’s share of the vehicle’s income, deductions, and other tax items.

Tax documents are delivered through CapitalPad’s SPV administrator. Timing depends on the underlying company’s reporting and completion of the vehicle’s tax preparation.

CapitalPad investors use the investor dashboard to review opportunities and track their investments. Investment documents, distribution records, and annual tax documents are provided through CapitalPad and its SPV administrator.

Investors can contact the CapitalPad team with questions about a specific investment or document.

Cash available for distribution is paid through the relevant CapitalPad SPV under the investment’s governing documents and distribution waterfall.

Payment amounts and timing depend on the underlying business, lender restrictions, reinvestment needs, and available cash. Investors should not assume a fixed income schedule.

CapitalPad expects quarterly reporting from sponsors and reviews the financial and operating information provided.

CapitalPad coordinates investor communications throughout ownership, including business updates, distributions, and annual tax documents. The reporting arrangements for an investment are addressed in its governing documents.

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

CapitalPad’s website and investment materials provide information for evaluating opportunities. Each investor is responsible for determining whether a particular investment is appropriate for their circumstances.

CapitalPad investments are illiquid private securities intended for long-term ownership. There is no established secondary market, and investors should expect to hold their interests for the duration of the investment.

Any transfer is subject to the governing documents. Cash distributions during ownership do not create a right to withdraw capital or sell an interest.

CapitalPad does not guarantee investment returns, distributions, or exit timing. Targets and projections depend on assumptions about business performance, financing, valuation, and other factors that may not occur.

Actual results may differ materially, including loss of the entire investment. Historical results and past performance do not guarantee future outcomes.

CapitalPad investments involve business, financing, execution, valuation, and liquidity risks. A company may lose customers, face higher costs, miss growth targets, or be unable to meet financing obligations.

Distributions can be reduced or delayed, an exit may occur later than planned, and investors may lose some or all of their capital. A single-company investment also concentrates exposure to that business.

Investors should review the business and sponsor, financial information, financing, investment plan, offering documents, investor rights, fees, distribution waterfall, conflicts of interest, and risk factors.

CapitalPad’s review does not replace an investor’s independent diligence. The offering and subscription documents govern the investment, and investors should resolve material questions before signing and funding.