$1M to $2.5M per transaction · 1,400+ accredited investors · No sponsor fees
CapitalPad for Sponsors
CapitalPad writes $1M to $2.5M equity checks into independent sponsor transactions and closes as a single counterparty: one diligence process, one set of subscription documents, one wire.
The fit is an established U.S. or Canadian company at $1M to $7M of EBITDA, either under LOI or in late-stage diligence.
No fees to sponsors at any stage.
CapitalPad for Investors
Review underwritten independent sponsor acquisitions one by one: the operating company, the sponsor’s track record, the structure, and the investor terms. Every deal opens a full data room with financials, a deal memo, and a sponsor interview.
Allocate when a deal clears your bar, and pass when it doesn’t. Minimums from $25,000 per deal; institutions allocate from $750,000.
CapitalPad for Sponsors
CapitalPad invests $1M to $2.5M of equity per independent sponsor transaction, backed by an investor base of more than 1,400 accredited investors, plus funds, family offices, and SBICs taking direct allocations alongside.
Send core materials and expect a read on fit within a few business days. Your deal stays blinded until it clears our review and investors sign NDAs.
CapitalPad expects market-standard economics, invests behind standard minority protections (information rights, quarterly reporting, approvals on major decisions) and does not seek operational control.
Sponsors pay nothing at any stage.
CapitalPad works only on independent sponsor transactions, and the team has executed them from your side of the table. Promote tiers, transaction fees, preferred returns, and LOI timelines are standard vocabulary here, not concepts that need explaining.
Every co-investor is pooled into a single SPV. You close with one counterparty and one wire instead of coordinating individual investors, separate subscription documents, and staggered funding schedules.
Sponsors never pay a fee to work with CapitalPad, whether or not the transaction closes. We earn carry from our own LPs, never from your economics.
Profitability, durability, and the operator’s track record, reviewed before anything is presented. Fewer than 5% of the transactions CapitalPad reviews reach investors, which works out to roughly one opportunity per month.
Each transaction carries its own structure and economics. The promote schedule, any preferred return, the waterfall, and the fees are disclosed in the deal room before you commit capital.
Funds, family offices, and SBICs take direct allocations from $750,000. Individuals invest through a single SPV per deal from $25,000. Approval carries no obligation to invest in any deal.
CapitalPad for Investors
CapitalPad is a private equity co-investment group for independent sponsor transactions in the lower middle market. Accredited investors allocate deal by deal to established, historically profitable companies, on the same terms as the funds and family offices in each transaction.
Most deals are established companies at $1M to $7M of EBITDA in unglamorous, durable sectors: trades, healthcare, business services, distribution, light industrial.
“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.”
The team behind CapitalPad has operated companies, invested institutionally, and executed independent sponsor transactions across 50+ lower middle market deals. Every opportunity is evaluated from both seats, the sponsor’s and the investor’s.
Portfolio companies span home services, healthcare, light manufacturing, business services, and distribution, acquired through control buyouts, recapitalizations, and buy-and-build platforms.
Sponsors with a deal under LOI should be prepared to share the following before review.
CapitalPad invests alongside independent sponsors acquiring established, historically profitable businesses in the lower middle market. Requirements include:
No. There is no cost to sponsors at any stage, whether or not a transaction closes. Placement agents and investment banks charge the sponsor; CapitalPad does not. Our economics come from carried interest paid by our own investors, and that carry is earned only if the deal performs.
Expect an initial read on fit within a few business days of sharing core materials. A firm commitment depends on diligence, documentation, and the investor process, and more lead time generally supports a larger allocation. Thirty or more days before close is the preferred runway.
CapitalPad’s direct check is $1M to $2.5M per transaction. Funds, family offices, and SBICs in the investor base can allocate directly at $750,000 or more per deal alongside the CapitalPad vehicle, which is how larger equity requirements get filled. Where the full raise lands depends on the transaction, the timeline, and the materials.
CapitalPad focuses on businesses with durable demand, repeat-customer revenue, low cyclicality, and clear profitability. Sectors include residential and commercial trades, healthcare and provider services, professional and business services, specialty distribution, and light industrial and manufacturing. Startups, distressed assets, and turnarounds are outside the mandate.
It’s driven by the sponsor. Some sponsors want a quiet check with standard reporting. Others pull us in on specific problems: evaluating add-on targets, pressure-testing a growth plan, or an operating question the team has dealt with firsthand. We take the seat you assign.
CapitalPad is open exclusively to accredited investors and institutions. All investors must complete our onboarding process for approval.
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.
$25,000 per deal for individual accredited investors. Institutional investors are expected to allocate at least $750,000 per deal.
Once your account is approved, you access the CapitalPad dashboard. Each deal is posted only after clearing underwriting and arrives with a full diligence package covering the company and its financials, the sponsor’s background, deal structure and investor terms, sources and uses, and the post-close value creation plan, plus a recorded sponsor interview.
You review the materials and decide whether to co-invest. If you proceed, you request an allocation in the dashboard. As the deal approaches closing, CapitalPad collects committed capital and issues subscription documents for signature. The minimum is $25,000 per deal for accredited investors.
CapitalPad earns compensation in two ways: a one-time administration fee and carried interest tied to deal performance.
Investors pay a 1.5% administration fee on each investment at the time of funding. This is a single charge per deal. There are no annual management fees.
CapitalPad also earns 20% carried interest, calculated deal by deal and subject to a 100% return-of-capital hurdle. CapitalPad earns nothing on a given investment until investors have received their full initial capital back on that deal. Compensation is tied directly to investor outcomes.
Institutional investors allocating $750,000 or more to a single deal invest directly and pay no carried interest.
The independent sponsor model is a deal-by-deal approach to private equity. Instead of raising a committed fund, an independent sponsor identifies a lower middle market company, negotiates the acquisition, and raises the equity for that specific transaction once the target is under LOI. Investors underwrite each deal on its own merits rather than committing capital to a blind pool, and the sponsor keeps flexibility across industries, deal sizes, and capital partners.
The structure is sometimes called the “fundless sponsor” model, since no blind-pool fund sits behind the sponsor. In practice, the sponsor forms a special purpose vehicle (SPV) for each acquisition and raises the equity from family offices, private equity funds, and accredited investors, typically through a Regulation D private placement.
Independent sponsor acquisitions are a steadily growing segment of private equity, and industry estimates generally put the number of active sponsors in North America well above a thousand. The segment concentrates in the lower middle market, where proprietary deal flow, seller relationships, and speed to close matter more than fund scale. On the supply side, the market is driven by baby boomer business succession: a large population of founder-led and family-owned companies with no internal successor coming to market over the next decade.
The strategy favors established, historically profitable businesses with durable demand, repeat-customer revenue, and multi-year operating histories. Sponsors typically avoid cyclicality, technological disruption risk, and turnaround situations, which gives investors exposure to stable industries rather than speculative ventures.
Sectors commonly pursued include business and industrial services, healthcare services, consumer services, light manufacturing, technology-enabled services, and professional services. What these share is resilience and fragmentation, which is the profile that supports buy-and-build: acquiring a platform company and growing it through add-on acquisitions.
A typical independent sponsor transaction involves the sponsor, the target business and its management team, the equity investors, and one or more debt providers. Enterprise value typically ranges from $5M to $50M, with most transactions falling between $10M and $30M. Equity usually covers 30 to 50% of enterprise value. Senior debt from banks or private credit lenders covers most of the balance, with seller notes, mezzanine debt, or SBIC funds filling gaps in the capital stack.
Diligence at this size runs through a quality of earnings report as standard practice, with the working capital peg negotiated alongside price. Indemnity escrows and caps still do the work that reps and warranties insurance handles in larger transactions. Sellers frequently roll over equity into the new structure or carry a seller note, and both signal continuity to lenders and investors.
The sponsor forms a dedicated vehicle for each deal, most commonly an LLC or C-corporation depending on tax treatment. Promote structure, preferred return hurdles, management fees, and governance are all negotiated before closing. Post-close, the sponsor controls the company at the board level, driving strategy, add-on acquisitions, and the eventual exit, while retaining or recruiting the management team. Investors hold a passive position with standard information rights and protective covenants.
According to the McGuireWoods Independent Sponsor Survey, the common economics in independent sponsor transactions run as follows:
The distribution waterfall pays out in tiers: invested capital and the preferred return come back to investors first, and the promote splits what remains above those hurdles.
The Citrin Cooperman Independent Sponsor Report provides additional benchmarking on independent sponsor economics, deal structures, and return profiles. Together with the McGuireWoods survey, these are the two most widely referenced public data sources for independent sponsor deal terms.
The independent sponsor community is built around a small number of recurring conferences where sponsors, capital providers, and advisors meet directly. The most notable:
Beyond sponsor-specific events, ACG’s DealMAX and the Small Business Investor Alliance (SBIA) conferences cover the broader lower middle market M&A ecosystem where many sponsors, lenders, and capital providers also operate.
CapitalPad is a private equity co-investment group where accredited investors invest in lower middle market acquisitions one deal at a time, working only on independent sponsor and post-LOI search fund transactions.
Search funds are the flagship structure of entrepreneurship through acquisition (ETA), tracked in the Stanford GSB Search Fund Study. Backers fund the search itself upfront, typically in exchange for rights to invest in the eventual acquisition, and the searcher commits to buying a single business and stepping in as CEO. Self-funded searchers follow the same operator path without the funded search.
Independent sponsors work in the opposite order and to a wider mandate. They raise equity deal by deal after a target is under LOI, take control at the board level rather than the operating seat, and can pursue multiple or larger transactions. The practical difference is mandate width and role: search funds are narrow and operator-driven, while independent sponsors are structured as repeat acquirers.
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.