# CAPITALPAD > Empowering Searchers, Enabling Investors ## Posts ### Search Fund Statistics - Financial Performance, Demographics, and Target Industries Summary: The Stanford Graduate School of Business 2024 Search Fund Study reports the outcomes and statistics for nearly 700 search funds formed in the U.S. and Canada. The latest search fund statistics show a record number of searchers from increasingly diverse backgrounds engaging in the model for the first time. Median returns remain consistent with previous years, with a few significant exits driving the overall average IRR higher in 2022–2023. In 2025 the popularity of the search fund model of entrepreneurship through acquisition (ETA) continues to grow, it’s attracting a diverse new crop of operators, entrepreneurs, and investors. It can be difficult to take the pulse of an industry that’s still evolving. But comparing the most up-to-date search fund statistics against historical data can offer insights into the magnitude and direction of changes in the way acquisition entrepreneurs are employing this model. Fortunately, one of the country’s premier business schools keeps meticulous records, offering us statistics going back to the original search funds it helped to pioneer 40 years ago. I've plucked some key takeaways out of the most recent study that capture the current state of the search fund landscape. About the Stanford GSB 2024 Search Fund Study The term "search fund" originated at the Harvard Business School in 1984. Since then, its use has spread to all the major business schools (Wharton, Kellogg, IESE, etc), with The Stanford Graduate School of Business publishing the best known biennial study covering every known traditional search fund in the U.S. and Canada. The report is a treasure trove of information going back 40 years to the very first search funds. The 2024 study contains statistics and outcomes for the 681 search funds formed in the U.S. and Canada since 1984, as of December 31, 2023. A Note About Self-funded Search Statistics The Stanford GSB 2024 Search Fund Study focuses on traditional (or core) search funds formed by first-time searchers. But it acknowledges that other forms of search funds exist, including self-funded searches and, to a lesser extent, independent sponsors. Comprehensive data that includes results from self funded searchers and every individual searcher would be virtually impossible to collect, but some overall patterns exist. Self-funded searchers who don’t have the benefit of institutional backing (no pre-committed capital) often use more debt in their capital structure, often taking out SBA loans that they must personally guarantee. This limits the size of self-funded search deals. Most self-funded searchers target deals in the $1m–$10m enterprise value range, whereas traditional search funds may look at deals anywhere between $5m and $50m. Self-funded searchers take on more personal risk but also retain more of the equity compared to entrepeneurs in traditional search fund deals. This means they can retain greater control over the business and enjoy extremely high upside when their deals go well. International Search Fund Statistics The Stanford GSB study covers search funds forms in the United States and Canada only. But it suggests a growing number of internationally based search funds and first-time searchers originating elsewhere globally. International search fund statistics are beyond the scope of this piece, but interested readers can find more information in a sister study conducted by the IESE Business School: International Search Funds - 2024. Key Findings: 2024 Search Fund Statistics Below are highlights of the key search fund statistics found in the 2024 Search Fund Study. For further details, you can read the full study. Number and Size of Search Fund Acquisitions The number of new search funds being formed leveled off in 2021 and 2022 before setting a new record high of 94 searches launched in 2023. The study finds no single factor behind the uptick, but credits broader education about the model and an increase in available investor capital with attracting more entrepreneurs to search funds. The number of investors looking to allocate into the search asset class has ballooned. CapitalPad has become one of the most active investors in the search fund space, with a specific focus on self-funded search fund deals. The ecosystem of debt financing sources has also expanded, as more and more lenders become comfortable with the search asset class. The number of acquisitions declined to 29, down from a peak of 40 in 2021 but still above the long-term trendline. Of those search funds that have concluded their search, 63% successfully acquired a company. Search Fund Activity by Year Image Source: Stanford Graduate School of Business 2024 Search Fund Study Looking at the median statistics for recent search fund acquisitions reveals the evolution of the search marketplace. The average search length returned to a more typical 20 months after shortening to 17 months in the 2020–2021 era. That reversion and the slight decrease in the median purchase price (from $16.5 million to $14.4 million) are likely due to the tighter monetary policy and higher interest rates since 2021. In the 2022–2023 window studied in the 2024 report, the median searcher’s initial capital raise reached $500k for the first time. The median EBITDA multiple of search fund deals was 7.0x. The median company EBITDA at purchase was $2.2 million, and the media EBITDA margin of acquired companies was 27%. The median EBITDA growth rate at purchase was 25%. Median Statistics for Recent Search Fund Acquisitions Image Source: Stanford Graduate School of Business 2024 Search Fund Study Acquisition Targets Search fund entrepreneurs choose their acquisition targets carefully, usually opting for industries that they have some experience in. Sectors ripe with high-revenue, consistently profitable  companies that are relatively straightforward to operate make the best targets for acquisition entrepreneurs. Searchers prefer businesses with sufficient size and profit margins that are insulated from seasonality, cyclicality, customer concentration, and upstart competitors. These factors characterize some industries better than others, including healthcare, business services, software and other technology, tech-enabled services, and manufacturing. Since 2014, healthcare and business service companies have accounted for half of all search fund acquisitions. The leading industries targeted by search funds in the past decade are: Healthcare: 25% Business services: 25% Software and technology: 22% Tech-enabled services: 16% Industries of Acquired Companies (2014–2023) Image Source: Stanford Graduate School of Business 2024 Search Fund Study Financial Performance and Returns The data from Stanford’s 2024 Search Fund Study found the returns from all search funds remaining in line with historical trends. The internal rate of return (IRR) of all search funds averaged 35.1%. The average return on investment (ROI) for all search funds was 4.5x as of the end of 2023. The data shows 63% of search funds result in an acquisition. And nearly 7 in 10 acquired companies generated positive returns. The returns of search funds, measured in IRR, for companies that have exited increased to 42.9% due to several exits in the most recent dataset that achieved significant returns. But the average IRR when excluding the top handful of performers remains little changed. Search Fund Outcomes Image Source: Stanford Graduate School of Business 2024 Search Fund Study Aggregate Search Fund IRR (2011–2024) Image Source: Stanford Graduate School of Business 2024 Search Fund Study Of all search fund-acquired companies, the ROI distribution shows that 69.5% generate positive returns, with the most common result falling in the 2x-5x return range. 10x ROI: 8% 5x–10x ROI: 17.5% 2x–5x ROI: 25% 1x–2x ROI: 18.5% Partial loss: 20.5% Total loss: 10.5% ROI to Date of Search-Acquired Companies (n=296) Image Source: Stanford Graduate School of Business 2024 Search Fund Study Searcher Demographics Broadly speaking, the demographics among search fund entrepreneurs continues to become more diverse as adoption of the acquisition entrepreneurship model expands. The 2023-2023 data shows an uptick in ethnic diversity among first-time searchers, more female searchers than ever, and a record high number of searchers participating without an MBA degree. First-time searchers now come from diverse professional backgrounds. Investment Banking/Finance: 23% Management Consulting: 16% General Management: 14% Private Equity: 12% Military: 10% Operations: 7% Entrepreneur: 7% All Others: 11% This represents a change from past years, where private equity professionals dominated the search fund industry, representing more than a quarter of all new searchers. Image Source: An Introduction to Entrepreneurship-Through-Acquisition and the Secrets to Its Success | Forbes.com (Mosaic ETA) Ethnicity of First-Time Searchers (2022–2023) Image Source: Stanford Graduate School of Business 2024 Search Fund Study Final Thoughts The search fund statistics tell us the landscape continues to evolve and provide opportunities for the next generation of entrepreneurial-minded professionals. Search funds continue to deliver strong financial returns for an increasingly diverse group of searchers and investors. Beyond the traditional (core) search fund universe, we know self-funded searches, independent sponsors, and other alternative search models continue to grow in popularity as well, further demonstrating the viability and variety of entrepreneurship through acquisition opportunities. Excerpt: Statistics from the latest Stanford GSB Search Fund Study ### Independent Sponsor Debt Providers Independent sponsors (fundless sponsors) operate without the backing of a dedicated investment fund. They must source lower middle market private equity acquisition targets and raise capital on a deal-by-deal basis. This make securing financing—both equity and debt—a crucial step of closing deals. In this article, we’ll explore the debt financing side of the equation. We also have a list of top equity investors, but that’s a separate subject. So where can independent sponsors obtain debt financing for acquisitions? Debt Providers for Independent Sponsors List of Banks Offering Commercial Loans List of Providers of SBIC Funds List of Private Credit Funding Sources Sources of Debt Financing for Independent Sponsors Commercial Lenders SBIC Funds Private Credit / Non-Bank Lenders Don’t Go It Alone Benefits of Partnering with CapitalPad to Secure Debt Financing Below is a list of specialized debt financing sources that work specifically with independent sponsor deals. There are both traditional financing options as well as private lending options (pros and cons to each) List of Banks Offering Commercial Financing Byline Bank First Bank of the Lake First Internet Bank Live Oak Bank List of Providers of SBIC Funds SBIC Directory List of Private Credit Lenders Antares Capital CaptialPad (for equity not debt) Golub Capital MidCap Financial Monroe Capital Pitchbook lenders list Preqin Sources of debt for independent sponsor model deals Independent private equity sponsors have options when it comes to raising debt capital. The best fit for your deal depends on many factors. These include deal size, the profile of the target company, and the speed and flexibility you need to close. Let’s review the most common sources of debt capital for independent sponsors and the pros and cons of each. Commercial Lenders Traditional bank commercial lending offers several financing options for M&A. Many super-regional banks and some larger credit unions support independent sponsor capital needs. Traditional lenders offer several commercial financing options suitable for independent sponsor deals: Term Loans Lines of Credit (Revolving Credit Facilities) Cash Flow Loans Asset-Based Loans (ABL) Each option carries different terms, rates, and collateral requirements. Usually independent sponsors can borrow at the floating rate plus 3-5% through commercial lenders. Traditional bank lenders factor the target company's financial health, leverage ratio, and sponsor experience into the terms they offer. Pros: Lower Interest Rates. Traditional bank loans typically carry lower interest rates compared to SBIC funds and private credit. Stable, Long-Term Capital. Term loans and revolving credit lines may provide more predictable repayment schedules. Regulatory Oversight. Banks are highly regulated and obligated to follow transparent lending practices. Cons: Stricter Underwriting Criteria. Banks often have a lower risk tolerance than many other funding sources. They may have more conservative leverage limits and call for significant equity contributions. They often require a sponsor track record. Collateral Requirements. Commercial loans secured by company assets limit flexibility if the asset values fluctuate. Slower Approval Process. Traditional banks conduct extensive due diligence and compliance checks. They can take longer to approve loans, slowing down deal timelines. Limited Flexibility in Deal Structure. Commercial banks may be less willing to finance highly leveraged deals or to provide flexible or customized terms. SBIC Funds Small Business Investment Companies (SBICs) are private investment funds. They're licensed and regulated by the U.S. Small Business Administration (SBA). SBICs leverage SBA-guaranteed loans to increase their lending capacity. This allows them to offer flexible financing with competitive terms, often through debt or mezzanine financing. SBIC funds can be a valuable source of debt capital for independent sponsors. Especially for lower middle market M&A deals involving smaller companies. Independent sponsors can find and apply for SBIC funds through several strategies. Start by browsing the SBA’s SBIC directory to identify potential financing partners. Networking through industry conferences, groups, and professional connections helps establish SBIC lender relationships. Financial advisors who specialize in SBIC transactions can help navigate this process. Pros of SBIC Debt Financing: Favorable Terms. SBICs leverage SBA guarantees. This enables competitive interest rates and flexible terms compared to traditional banks. Independent sponsors can often obtain a fixed rate around 12-14%. Higher Leverage. SBIC funds may offer higher leverage, which can reduce the equity requirement for a deal. Specialized Focus. SBICs focus on lower middle market businesses. This makes them more attuned to the unique needs of these transactions. Cons of SBIC Debt Financing: Regulatory Complexity. SBICs operate under SBA oversight. This can add layers of compliance and due diligence not found with private credit. Longer Approval Timelines. The approval process can take longer than traditional bank loans or private credit. This can impact deal speed. Limited Availability. Only a select number of private investment funds receive the SBIC designation. This means fewer SBICs are available to lend, and makes the competition for funds stiffer. Private Credit / Non-Bank Lenders Private credit is something of a catch-all term. It encompasses a wide array of non-bank financing sources and lending structures. Private credit and non-bank lenders can offer independent sponsors flexible, customized debt solutions. They can provide faster execution and higher leverage, although at higher costs. These lenders tailor financing structures to match unique deal economics and risk profiles. Common structures include unitranche loans, mezzanine financing, subordinated debt, and direct lending facilities. Each of these addresses different capital needs and investor risk-return expectations. Pros: Flexibility. Private lenders can structure creative, customized financing solutions. These may better suit the unique profiles of lower middle market M&A deals. Speed. Many private lenders can execute deals more quickly than traditional banks or SBICs. Higher Leverage. Non-bank lenders can offer more aggressive leverage, reducing the equity contribution required. Cons: Cost. Private credit providers often charge higher interest rates and fees than commercial banks and SBICs. Covenants. Private lenders may impose stricter or more complex covenants to mitigate perceived risks. Less Regulation. Private credit is less strictly regulated than traditional banking. This can result in less transparency and stability from private lenders. Don’t Go It Alone If this all sounds a little overwhelming, you’re not alone. Independent sponsor debt financing is a niche topic that most people never encounter. Even fewer have any need to master it. Fortunately, there is help available to guide sponsors through the debt financing process. Sponsors who prefer white-glove service can consider partnering with CapitalPad. The CapitalPad team helps independent sponsors close lower middle market M&A deals. Reach out to CapitalPad to discuss a 1-on-1 partnership. You'll get help arranging debt financing from ideal funding sources with favorable terms. CapitalPad can also help simplify your equity capital raise, too. Benefits of Partnering with CapitalPad to Secure Debt Financing Partnering with CapitalPad to find and secure debt financing lets you leverage our team’s strengths. Network - Working with CapitalPad gives your network an instant level up. We connect our partners to quality lenders who understand lower middle market M&A. Expertise - Unsure how to structure your deal or which types of debt providers to pursue? Let CapitalPad guide you toward the ideal capital partners and avoid costly missteps. Experience - The team at CapitalPad knows how to raise debt capital for acquisitions. We’ve lent our deep experience to help successfully close a multitude of lower middle market M&A deals. Bonus: Equity Investors - CapitalPad helps investors get better access to independent sponsor deals. This can lead to a win-win scenario for both parties, sponsors meet capital providers, and investors get access to deal-flow. How to Choose Your Ideal Funding Source: Key Considerations For Independent Sponsors Having lots of options can be a blessing and a curse. It can be difficult for independent sponsors to choose which path to pursue. But several key factors can help to guide you toward the ideal sources of debt capital. How Much Debt the Deal Supports. Compare the deal’s leverage ratio to lender expectations. Traditional commercial lenders usually have less flexibility to support deals with higher leverage. Debt-to-Equity Mix. Find a debt financing source that allows you to maintain a health debt-to-equity mix. Choose a lender that offers fair terms while keeping the deal financially stable. Required Level of Due Diligence. Different lenders must undertake different levels of due diligence. Some (especially SBIC funds) require you to share significantly higher amounts of documentation or financials. Your Experience Level as a Sponsor. Lenders favor independent sponsors who have a history of proven success. Conservative traditional banks may only work with sponsors with a demonstrated track record. How to Approach Lenders to Secure the Best Terms Lenders have a finite amount of capital to deploy. Lower middle market M&A financing can be quite competitive. Independent sponsors should approach lenders strategically. Begin establishing relationships with lenders well before any deal materializes. Engage with potential debt providers through industry events, networking groups, and direct outreach. This helps lenders become familiar with you before you make any sort of ask. When a deal opportunity arises, help the lender understand its merits by crafting a compelling investment thesis. Assemble a financing package that outlines the deal’s strategic value, the target company’s growth prospects, projections, risk assessment, your exit strategy, and your background and track record. Last comes negotiating key terms, such as interest rates, covenants, and repayment structures. Reference the McGuireWoods Independent Sponsor Deal Survey to find today's standard market terms. That's a great place to start your negotiation. Then leverage your relationship with the lender and the strength of your financing package to push for competitive rates and flexible terms. What Next? The M&A landscape is challenging. But it's a rewarding path that allows successful sponsors to share in the upside of the business acquisition deals they arrange. Securing debt financing is a key challenge for independent sponsors. Decide whether to seek debt capital from traditional banks, SBIC funds, or private credit funding sources. Understanding your options and coming to potential lenders well prepared puts you in a stronger position. Build relationships with potential lenders in advance. Develop a compelling investment thesis for your deal. Highlighting your background and experience can give you a huge advantage. Fundless sponsor financing is often complicated and competitive. But the resources provided here will help get you started on the journey. For extra support in navigating the debt financing landscape, consider partnering with CapitalPad. Our team can connect you with the right funding sources. We'll guide you through the process of securing debt financing for your transaction. Excerpt: Options for independent sponsor debt providers. Banks, SBICs, and private credit. ### Investor equity injection requirements from the SBA This post is written specifically for minority equity investors providing capital in self-funded search fund deals. For reference, “minority investor” means an investor staying under the 20% ownership threshold that would trigger a personal guarantee (which we will never do at CapitalPad). Without a proper guide, this process can be somewhat cumbersome. Hopefully this shines some light on what you need to do when providing "source of funds" documentation for M&A deals involving SBA loans. Overview of SBA requirements from equity investorsWhy so many requirements?Three months of bank statementsFunding proofUS-person verification First off… why do the lenders require so much documentation? You probably know this, but just in case you don’t, the SBA is not directly providing funding to searchers. Individual banks are providing the debt financing (loans) for these acquisitions, and the SBA is providing a sort of guaranteed backing to the lending banks. The lender makes the loan, and if the loan goes south, then the SBA will provide up to 90% of the principle amount to the bank. It’s an amazing program that caps the downside for banks and provides a safety net. This encourages banks to make these acquisition loans, which they might not be willing to do otherwise, or at least at the same rates (regardless of how low the default rate actually is). But! There is a huge but! In order for the SBA to guarantee and backstop these loans, they require that each lender to follow strict procedures. If a lender fails to follow the correct procedure, then the SBA can reject the loan from being guaranteed (known as “repair”). Obviously, this terrifies bankers, and the individual loan officers would have their career on the chopping block. The number one way that banks mess up these strict requirements is through poor documentation of the equity injection from investors. So if the process of providing funding proof seems onerous, this is why. The lenders have every incentive to be overly precise, regardless of how cumbersome it may seem to investors. The three requirements of of investors There are edge cases outside of this, but for 99% of search fund investors, the below is what is needed. 1) The last three months of bank statements from the sending account Note that the little details mentioned are very important! These statements must show both the “name” and the “account number.” The name on the statements must match what was used on the deal documents. If you invested through an entity, it will need to match, or you will need to show proof of direct ownership of entity. If the funds in the account are not “seasoned” (i.e. you transferred in capital from somewhere else into this account to fund the deal), then you will need to provide three months worth of statements from the transferring account. 2) Funding proof of the transaction This is where it gets difficult You need to show direct proof that the funds left your account and went to the acquisition-funding account (to the actual company, to the attorney, to CapitalPad’s funding account, etc).This documentation needs to include: Your name and account number Showing the funds leaving your account Showing the location where the funds are going Why is this so difficult? Because about half of the actual banks that most investors use don’t usually have very good resources on being able to generate this very specific proof. Wire verifications sometimes show 2/3 of the requirements, but not the final one. How do you solve this? The dream scenario is if you fund a transaction on the 28th of the month and can then provide the lender with the full monthly statement on the 1st. If not, you need to do whatever you can (screenshots, talk to the bank, etc) in order to satisfy this requirement. 3) Lastly, you must verify that you are a “US Person”. This is a brand new requirement, but now all investors in deals that are using an SBA loan must confirm that they are either a legal US resident or a US citizen. Non-US people can no longer be on the cap table (sorry guys!). Obviously all of these SBA equity injection requirements can be quite a hassle, but we believe the possible returns offered from searcher deals more than make up for the one-time nuisance. ## Pages ### Blog Resources ### Independent Sponsor The Independent Sponsor Investment Platform CapitalPad connects accredited investors, funds, and family offices with independent sponsor–led acquisitions in the lower middle market.CapitalPad connects accredited investors, funds, and family offices with independent sponsor–led acquisitions in the lower middle market. Join the Network Invest in Sponsor Deals Gain access to curated independent sponsor opportunities across the lower middle market. CapitalPad evaluates hundreds of deals and delivers only the most compelling transactions. See How It Works Raise Capital CapitalPad partners with independent sponsors to provide equity for acquisitions. We invest directly and bring in a network of accredited investors, funds, and family offices to close your deal. Fund Your Deal 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 exclusively on established, cash-flowing businesses led by experienced sponsors—not speculative turnarounds or venture plays. Unlock differentiated deal-flow in this compelling corner of private equity through CapitalPad’s disciplined approach—rigorously reviewed opportunities, aligned incentives, and streamlined participation. See How It Works Disciplined Deal Selection CapitalPad rigorously 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.  See How It Works 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. See the Process CapitalPad for Sponsors Fund Your Acquisition with Confidence CapitalPad invests equity in independent sponsor–led acquisitions, alongside a trusted network of family offices, funds, and accredited investors. Fill your equity gap and close transactions with speed and certainty. See the Process 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 FAQ for Sponsors 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 larger capital requirements typically require more time. 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 recurring 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. FAQ for Investors 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 fully aligned with investors. We do not charge management fees. We only earn a 20% share of profits after investors have received their full initial capital back. If a deal is not profitable, investors pay nothing. Institutional investors allocating $750k or more do not pay a carry. Industry Overview 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. 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. Investment Disclosures 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 Searchers, Sponsors & Capital Converge Get Started ### Invest in Independent Sponsor Deals CapitalPad for Investors Invest in Independent Sponsor Deals Access a highly curated list of independent sponsor, search fund, and lower-middle market acquisition deals. Why Invest with CapitalPad? Curated Deal Flow CapitalPad curates a firehose of deal flow, only presenting you with the few that pass our strict criteria. Attractive Return Profile Independent sponsor deals have historically provided attractive potential returns.¹ Profit-Focused Assets Zero Startups. CapitalPad only features acquisition deals in established, profitable companies. CapitalPad for Investors Expand your access with curated deal flow Independent sponsor deals, simplified. CapitalPad provides funds, family offices, and accredited investors access to a curated selection of deal flow. Passively invest in one-off lower middle market private equity deals. From HVAC to machine shops to business services. Invest alongside motivated dealmakers targeting companies with proven longevity. Apply to Invest CapitalPad Makes Investing in Deals Simple Expand your deal flow with a few clicks VS Old way Painful networking Endless conferences Limited dealflow Poor deal economics NDAs in .doc Review bad pitches “This is actually a startup” Messy deal rooms Excruciating closings Invest CapitalPad Review curated deals - - - - - - - - Invest Accredited investors can join CapitalPad for instant curated access. Apply Now CapitalPad for Investors How does it work? CapitalPad simplifies the process of hunting down eligible fund-less sponsor deals. Non-attractive opportunities or those not using the standard accepted deal economics are rejected from the platform. Inside, deal rooms are standardized and simplified, allowing investors to quickly determine whether a deal is worth investigating further. Apply to Invest Curated Access Highly curated deals inside the dashboard Simplified Process The easiest way for independent sponsor investors to build quality deal-flow. Direct Entry Point Funds get direct access, and accredited investors are pooled together to provide meaningful checks. Dual Benefits Potential for curated deal-by-deal access combined with simplified diligence. “CapitalPad has made investing in SMB deals much easier. They find the deals, present them simply, and make the closing process painless. It's an excellent platform.” Matt Diggity Entrepreneur and Investor What's inside a deal room? LOI CIM Deal teaser Due diligence documents (financials, P&L, tax documents) Deal terms Details of debt financing Post-acquisition plans Detailed models and distribution plans Investor terms (preferred return, IRR, etc) And much more Apply Now FAQ What deals are on CapitalPad? CapitalPad is an independent sponsor platform featuring independent sponsor (and search fund) deals in a variety of diversified industries. Common examples include home services, B2B business services, light manufacturing, and consumer services. CapitalPad only features acquisitions of historically profitable companies. No startups or seed capital. Do I need to be accredited? Yes. All investors must be accredited investors according to the SEC definition. I represent a fund or family office, how do I gain access? If you represent an entity that deploys checks of $750k or more (per deal), you may sign up as an institutional investor for no-fee access to CapitalPad. What is the minimum investment amount? Generally deal minimums are $10,000 each for accredited investors (who are pooled together). Institutional investors are requested to invest at least $750,000 per deal. Is there a cost to using CapitalPad? CapitalPad does not charge sponsors for raising capital. How CapitalPad is compensated: For accredited investors, CapitalPad is entitled to a 20% carry from investors. After an investor receives a return of initial capital in a deal, then CapitalPad is entitled to 20% of any profits. For funds and family offices, no fee is charged. Investment Disclosures CapitalPad does not provide specific investment advice to any individual investor. The information on this website specifically related to any potential investment opportunity is not provided by CapitalPad. Investors acknowledge and accept the risks associated with privately investing. Investors also acknowledge that past performance of entities, individuals, or products or services is not a guarantee of future performance. Investors are solely responsible for completing an independent due diligence review before investing. Investment products are not FDIC insured, may lose value, and there is no bank guarantee. A loss of an Investor’s entire investment is possible, and no profit may be realized. There is no guarantee that projections related to the performance of any potential investment will be realized. There may be no secondary market for the sale of securities. Any investment may not be accompanied by sufficient voting rights to have a material impact as to the operation of the entity and all Investors should assume any such investment will not be accompanied by meaningful voting rights. Past performance is no guarantee of future results and any expected returns on disclosed through the platform are hypothetical and may not reflect actual future performance. All investments made through the platform may result in partial or total loss. Join the Independent Sponsor Revolution Get Started ### Raise Capital for Independent Sponsor Deals CapitalPad for Sponsors Equity Capital for Independent Sponsors Equity Capital for Independent Sponsors Raise equity with CapitalPad's curated investor network of funds, family offices, and accredited investors. (free for sponsors)Raise equity with CapitalPad's curated investor network of funds, family offices, and accredited investors.(free for sponsors) Submit Your Deal Close With Confidence, Raise With Ease Close With Confidence, Raise With Ease Capital Without the Cold Calls Connect directly with family offices, funds, and accredited investors without the need for extensive outreach or months of networking. Efficient Execution From teasers and NDAs through final funding, CapitalPad manages the mechanics so you can focus on closing the transaction. No Cost to Sponsors CapitalPad has an aligned partnership model with investors, and is only compensated when our capital allocators succeed. CapitalPad for Sponsors Funding Independent Sponsors, Deal by Deal Funding Independent Sponsors, Deal by Deal Tailored for sponsors, by sponsors. CapitalPad streamlines the fundraising process, allowing sponsors to stay focused on closing the transaction. We invest directly, connect your deal with funds and family offices, coordinate closing, and stay involved after close to support long-term growth. Get Started Raise Faster, Close Stronger With CapitalPad, one submission connects you to funds, family offices, and investors ready to back your deal. VS The Old Way Search forums Cold outreach Send NDAs one by one Messy data room Endless calls Scattered diligence Coordinate random wires Chase signatures Close deal (finally) With CapitalPad Post your deal once Finish your raise Close deal Close deal Close deal Close deal Close deal Close deal Close deal Independent sponsors use CapitalPad to cut the fundraising grind and focus on closing. Fund Your Acquisition CapitalPad for Sponsors How CapitalPad Works Step 1: Establish Your Profile Register and build your sponsor profile. Even if you don’t yet have a transaction under LOI, we can connect you with vetted opportunities and help prepare you for capital raising. Step 2: Submit Your Transaction When you secure a post-LOI deal, submit your materials for review. Our team evaluates each opportunity against our investment criteria to ensure alignment with our network of institutional and family office investors. Step 3: Raise Capital If approved, a blinded teaser is shared with accredited investors, funds, and family offices alongside an NDA. Allocations of individuals are aggregated into a single entity, simplifying execution and providing one consolidated equity investment into your transaction. Step 4: Close & Scale CapitalPad coordinates the closing process and remains engaged after closing, offering strategic resources to support growth and long-term value creation. Submit a Deal Access to Capital Tap into a vetted network of accredited investors, family offices, and institutional partners committed to supporting independent sponsor-led acquisitions. Streamlined Execution Individual investor commitments are aggregated into a single vehicle, ensuring one wire and one entry on your cap table without the complexity of managing multiple counterparties. No Cost to Sponsors There are no platform or success fees for sponsors. CapitalPad is compensated only when investors participate profitably, keeping our incentives directly aligned with yours. Ongoing Partnership Our involvement extends beyond the close. We remain engaged with sponsors post-transaction, offering strategic guidance and resources to help accelerate value creation. CapitalPad Deal Submission Requirements CapitalPad supports sponsors at the post-LOI stage. To give investors full confidence in your raise, be prepared with the following materials. Executed LOI Deal Memorandum Transaction Overview Investment Merits Sources & Uses Historical Financials Financial Model Investor Terms Debt Status Value Creation Plan Submit Your Deal Sponsor FAQ What types of deals are eligible for CapitalPad? CapitalPad supports acquisitions led by independent sponsors in the lower middle market, where investor demand is strongest and deals are most actionable. We focus on opportunities with smaller enterprise values, fragmented competition, and room for professionalization.Deals must generally be under LOI, supported by demonstrated historical profitability, and structured with a clear path to close.While CapitalPad is industry-agnostic, we emphasize durable sectors with recurring revenue, fragmentation, and consolidation potential.Representative focus areas include:Business Services – Outsourced services, testing & inspection, staffing, marketing, and back-office functionsHealthcare Services – Physician practice management, behavioral health, home health, hospice, dental, and veterinary practicesIndustrial / Niche Manufacturing – Precision machining, aerospace & defense suppliers, engineered components, specialty chemicalsConsumer Products & Services – Food & beverage, pet products, franchising, fitness, and education servicesInfrastructure & Facilities Services – HVAC, waste management, utilities contractingLogistics & Transportation – Third-party logistics providers, specialty truckingFinancial Services / Fintech Niches – Insurance distribution, specialty financeCapitalPad is more cautious on capex-heavy, cyclical, or highly commoditized industries such as oil & gas, heavy manufacturing, or discretionary retail. How is CapitalPad compensated? There are no fees or costs for sponsors to use CapitalPad.Our compensation comes exclusively through carried interest paid by investors, earned only after investors achieve returns. This structure ensures full alignment between sponsors, investors, and CapitalPad. Who invests through CapitalPad? CapitalPad is a direct equity capital provider to independent sponsor deals, but also has a network composed of high net worth accredited investors, family offices, private funds, and SBICs with established track records in sponsor-led acquisitions. Who has access to my deal? Once approved, CapitalPad circulates a blinded teaser to our curated investor network through a secure platform. Only investors who execute an NDA and non-circumvention agreement gain access to the full deal materials and diligence room. All others remain restricted to the teaser summary. Will my deal remain confidential? Yes. All opportunities begin with a blinded teaser. Full deal materials are only accessible to investors who have executed an NDA and non-circumvention agreement within the secure CapitalPad platform.Without those agreements, investors remain limited to the teaser. What materials are required to submit a deal? Sponsors should be prepared to provide a complete post-LOI package, including:Executed LOIDeal memorandum / investor deckCompany overview and investment meritsHistorical financials (P&L, tax returns, statements)Financial model with base, upside, and downside casesSources & uses of fundsInvestor terms (preferred return, IRR, step-up structure)Acquisition terms and purchase agreement outlineStatus of debt financing (lender discussions or term sheets)Post-close growth and value-creation plan How long does the review process take? CapitalPad typically evaluates submissions within 2–3 business days. Sponsors receive timely feedback, including either approval to proceed or specific guidance on next steps. How long does it take to raise funds? Timelines depend on deal size, structure, and investor demand. In general, the more lead time provided, the greater the potential allocation. Some transactions have been funded in as little as 14 days, but larger raises almost always require additional time.Sponsors are encouraged to share specifics early so we can provide tailored feedback on timing. How much does CapitalPad allocate? CapitalPad invests between $750,000 to $2,000,000 in independent sponsor deals.However, larger transactions may be completed by combining CapitalPad’s direct commitments along with allocations from our network of institutional partners.To participate, institutional investors must typically commit $750,000 or more each, ensuring sufficient scale to meet sponsor requirements. Does CapitalPad offer debt financing? No. CapitalPad focuses exclusively on equity investments.However, we maintain relationships with various lenders and SBIC funds.Contact us if you’d like an introduction. What are the typical independent sponsor investor terms? Investors expect market-standard economics that align sponsor incentives with customary protections for minority equity holders.A typical structure for independent sponsor transactions includes:Closing Fee: 1–2%, often rolled into the equity raiseManagement Fee: Up to 5% of trailing twelve-month EBITDA, generally with a floor and capCarried Interest: A scaling promote structure tied to MOIC hurdlesPreferred Return: 6–12%Target Returns: CapitalPad generally expects to see a modeled IRR of 30%+ under moderate growth assumptionsIndependent sponsor deal terms should be consistent with benchmarks outlined in the McGuireWoods Independent Sponsor Study and other market surveys. What is CapitalPad's SPV structure? All CapitalPad investor allocations are consolidated into a single special purpose vehicle (SPV).The SPV invests directly into your transaction, so sponsors only manage subscription agreements and wire requests with CapitalPad as the SPV manager. This eliminates the complexity of coordinating dozens of individual investors.For larger institutional commitments ($750K+), investors typically invest directly rather than through the SPV. Does CapitalPad assist with deal sourcing? Beyond providing capital, CapitalPad remains engaged after closing to help sponsors drive growth and professionalize operations.Our support can include vetting service providers, redesigning websites, scaling marketing initiatives, and offering strategic or operational guidance. When needed, we are willing to roll up our sleeves and work alongside sponsors to create long-term value. Does CapitalPad support sponsors beyond capital? Beyond providing capital, CapitalPad remains engaged after closing to help sponsors drive growth and professionalize operations. Our support can include vetting service providers, redesigning websites, scaling marketing initiatives, and offering strategic or operational guidance. When needed, we are willing to roll up our sleeves and work alongside sponsors to create long-term value. Where Searchers, Sponsors, & Capital Converge Get Started ### Historical Search Fund Returns The displayed returns are taken from the Stanford Search Fund Study Aggregate Search Fund IRR 2011 - 2024 Returns The Stanford Business School produces a biannual search fund report. The report shares statistics such as trends, background, target industries, and overall returns.It's an enjoyable read, and we can't recommend it enough.The 2024 search fund study evaluates the returns of 681 search funds in both the United States and Canada. These funds undertook the process of using the standard traditional search fund model.The report covers topics such as the number of raised funds, industries of acquired companies, and realized and unrealized returns for investors in search funds.The study finishes off with details on search fund models, success rates (hinting that diversification is key) and exit timing. Reported returns from post-exit search fundsFor the 2024 study, IRR for search funds was reported as:42.9% for all funds41.3% (excluding the top 3 funds)40.8% (excluding the top 5 funds) From the 2024 Stanford Search Fund Study Updated: August 22, 2025 Disclaimer Financial DisclaimerThis content is for informational purposes only and does not constitute investment advice.Past performance does not guarantee future results. Search fund investments are speculative and illiquid with substantial risk of loss, including total loss of investment.The performance data is based on third-party studies and publicly available information. Individual results may vary significantly from historical averages. All investments involve risk and are only available to accredited investors. CapitalPad makes no claims to possible returns by investors.CapitalPad does not provide investment advice. Consult qualified financial professionals before making investment decisions.  Financial DisclaimerThis content is for informational purposes only and does not constitute investment advice.Past performance does not guarantee future results. Search fund investments are speculative and illiquid with substantial risk of loss, including total loss of investment.The performance data is based on third-party studies and publicly available information. Individual results may vary significantly from historical averages. All investments involve risk and are only available to accredited investors. CapitalPad makes no claims to possible returns by investors.CapitalPad does not provide investment advice. Consult qualified financial professionals before making investment decisions.  ### Invest CapitalPad for Investors Invest in Enduring Small Business Acquisitions Invest in Enduring Small Business Acquisitions CapitalPad curates sponsor-led deals in established, historically profitable lower middle market companies. (only for accredited investors)CapitalPad curates sponsor-led deals in established, historically profitable lower middle market companies. (only for accredited investors) Apply for Access Boring Businesses, Exceptional Assets Attractive Return Profiles Search fund and independent sponsor acquisition deals historically show compelling return profiles. Diversification Benefits Low correlation to public markets, backed by recurring cashflows and essential industries. Real Earnings, Not Hype Businesses with established cash generation instead of speculative growth. CapitalPad for Investors Build a Passive Portfolio of Legacy Small Businesses CapitalPad offers accredited investors a way to build a diversified, passive portfolio of small businesses.Every deal involves the acquisition of an established, cash-flowing company led by motivated operators.From HVAC to healthcare, manufacturing to business services, these are essential industries with enduring demand. Apply for Access Apply for Access Small Business Investing, Simplified What once was ten steps is now two—review curated deals, invest.Build a quality portfolio of lower middle market companies. VS The Old way Painful networking Limited dealflow Scour forums Poor deal economics NDAs in .doc Review bad pitches “This is actually a startup” Messy deal rooms Excruciating closings Invest in deal With CapitalPad Review curated deals Invest in deals Relax Relax Relax Relax Relax Relax Relax Relax Accredited investors can apply for access to curated SMB Deals. Apply Now CapitalPad for Investors How does CapitalPad work? Step 1: Access Curated DealsApproved members gain access to curated sponsor-led acquisitions—shared only when opportunities meet our standards.Step 2: Review Deal RoomsEach deal includes a full diligence package, with company details, financials, models, and a sponsor interview.Step 3: Request an AllocationWhen you like a deal, request an allocation. CapitalPad pools approved investors into a single entity, simplifying execution.Step 4: Invest & ParticipateAfter closing, investors receive equity ownership and participate in any ongoing cash distributions and potential capital gains at exit. Apply for Access Pooled Strength Gain the benefits of institutional-sized investors with commitments starting at just $25,000. Curated Deal Flow Access the limited select opportunities that pass CapitalPad's strict standards. Streamlined Process From diligence to closing, everything is managed seamlessly in one platform. Cashflow and Growth Potential for ongoing cash distributions and possible long-term exit gains.“CapitalPad has made investing in SMBs much easier for me. They find the deals, present them simply, and make the closing process painless. It's an excellent platform.” Matt Diggity Entrepreneur and Investor Transparency in Every Deal Each deal room provides access to: Deal memo & sponsor overview Post-close value creation plan Company description & investment merits Debt financing details Accepted LOI and deal structure Interview with deal sponsor Investor terms (preferred return, IRR, step-up) Distribution waterfall structure Financials & diligence (P&L, tax returns, models) Additional materials Apply for Access Investor FAQ Who is eligible to invest on CapitalPad? CapitalPad is open exclusively to accredited investors. All investors must complete our onboarding and approval process before accessing opportunities on the platform. Can institutions such as funds or family offices participate? Yes. Funds, family offices, and SBICs active in the independent sponsor space are welcome to invest through CapitalPad.A minimum commitment of $750,000 per deal is required for direct deal flow access, and institutional status can be designated during onboarding. What types of businesses does CapitalPad invest in? CapitalPad focuses exclusively on sponsor-led acquisitions in the lower middle market — a segment where valuations remain attractive and traditional private equity competition is limited.These opportunities are led by acquisition entrepreneurs, most often self-funded searchers or independent sponsors, acquiring established small and medium-sized businesses with a history of strong profitability.Unlike startups or turnaround situations, these companies already generate consistent cash flow and have long operating track records.Rather than investing in new ventures, CapitalPad investors participate in transitions of ownership. The businesses continue to operate as they always have, while CapitalPad and its co-investors gain the opportunity to become partial owners during the change in hands.CapitalPad’s target companies are concentrated in sectors with stable demand and low disruption risk. Representative examples include:Home Services – Reliable demand services like plumbing, HVAC, and maintenance workProfessional Services – Established practices like accounting or niche consultingLocal Consumer Services – Everyday needs like garment care and vehicle supportHealthcare Services – Non-discretionary care, including home health and physical therapyLight Industrial – Specialized manufacturers with recurring B2B relationshipsDigital & IT Services – Small firms providing marketing or technology support What is the minimum investment size? For accredited investors, minimum commitments start at $25,000 per deal.Institutional investors seeking direct access are required to allocate at least $750,000 per deal. How frequently are new deals available? Deals are posted only when they meet CapitalPad’s strict standards.Opportunities may be infrequent, as quality is prioritized over volume.Our disciplined approach and extreme patience have made CapitalPad one of the leading investors in the independent sponsor and self-funded search space. What is the process for investors to participate in deals? Once an account is approved, investors gain access to the CapitalPad dashboard.When new deals are posted, each includes a complete diligence package with:Deal memoSponsor overviewInvestor termsDeal structureFinancial diligence docs (P&L, tax returns)Financial modelsSources & uses of fundsValue creation planDeal sponsor interviewAdditional supporting materialInvestors can review the materials and request an allocation to co-invest. What is the liquidity profile of these investments? CapitalPad investments are designed for long-term ownership and are not liquid. While cash distributions may occur during the holding period, many returns are typically realized when the company is sold. This long-term structure enables operators to focus on disciplined growth. How is CapitalPad compensated? Our incentives are directly aligned with investors — CapitalPad only earns through performance.CapitalPad charges no management fees and receives a 20% share of profits only after investors have first received their full initial investment. If a deal does not generate profits, investors pay nothing. Investment Disclosures CapitalPad does not provide individualized investment advice, nor does it author or guarantee the information contained in deal materials. Investors acknowledge and accept the risks associated with private investments, including the possibility of a total loss of capital.Past performance of entities, individuals, or products is not a guarantee of future results. Any return projections are hypothetical in nature and may not reflect actual future performance.Investors are solely responsible for conducting their own independent due diligence before making an investment decision. Investments offered through CapitalPad are not FDIC insured, may lose value, and carry no bank guarantee.There may be no secondary market for securities, and investments may not provide voting rights sufficient to influence the management or operations of a company.All investments made through the platform involve risk and may result in partial or total loss. Where Searchers, Sponsors & Capital Converge Get Started ### Raise Capital CapitalPad for Sponsors Equity Capital for Sponsor-Led Acquisitions Equity Capital for Sponsor-Led Acquisitions Raise equity through CapitalPad’s curated network of accredited investors, exclusively backing self-funded searchers and independent sponsors. (free for sponsors) Submit Your Deal Raise Smarter, Close Faster Raise Smarter, Close Faster Direct Investor Access Eliminate months of outreach. CapitalPad brings your deal directly to an engaged investor base. One Entity, One Process Investors are consolidated into one SPV, with CapitalPad managing NDAs, documentation, and wires. Aligned Incentives No fees for sponsors. CapitalPad only participates when investors realize returns, ensuring aligned interests. CapitalPad for Searchers Built for Searchers and Independent Sponsors Built for Searchers and Independent Sponsors Built for sponsors, by sponsors. CapitalPad simplifies fundraising so you can stay focused on closing your deal. We invest alongside you, connect your deal with accredited investors, manage the closing process, and remain engaged post-close to support operational growth and long-term scaling. Get Started Raise Efficiently, Close with Confidence Eliminate investor outreach. Post once on CapitalPad and streamline your raise from LOI to close. VS The Old Way Search on forums Cold outreach Send NDAs one by one Individual data room Dozens of zoom calls Chase signatures Coordinate random wires Close deal (finally) Work on what matters With CapitalPad Post your deal once Close your deal Work on what matters Work on what matters Work on what matters Work on what matters Work on what matters Work on what matters Work on what matters Simpify your raise with CapitalPad, built exclusively for searchers and independent sponsors. Fund Your Acquisition CapitalPad for Searchers How does CapitalPad work? Step 1: Create Your Account Register and complete your sponsor profile. For those not yet under LOI, CapitalPad can connect select searchers with vetted deal flow to facilitate your pipeline. Step 2: Submit Your Deal When a transaction is under LOI, submit it for review. Our investment team evaluates each opportunity to confirm alignment with platform criteria. Step 3: Raise Capital Approved opportunities are distributed to CapitalPad’s network of accredited investors, family offices, and institutional partners. Allocations are pooled into a single entity, providing you with one consolidated commitment. Step 4: Close & Grow CapitalPad coordinates closing logistics and remains engaged post-close, offering value-add resources and strategic support to help scale portfolio companies. Submit a Deal Access to Capital Access a curated network of accredited investors, family offices, and institutional partners with experience in sponsor-led transactions. Streamlined Closing Allocations are aggregated into a single investment vehicle, so sponsors receive one check, without the burden of multiple investors, wires, and signatures. No Cost for Sponsors Raising on CapitalPad is always free for sponsors. Our compensation is derived solely from carried interest once investors realize returns. Long-Term Partnership Our team remains engaged post-close, offering strategic guidance, vetted resources, and operational support to help sponsors scale portfolio companies effectively. What Sponsors Need to Raise on CapitalPad CapitalPad is for post-LOI deals. Sponsors are expected to prepare the following documentation to ensure a transparent and efficient raise. Accepted LOI Deal Memo Acquisition Terms Investment Merits Sources and Uses of Funds Financials (P&L, tax returns, statements) Financial Model & Projections Investor Terms (Preferred Return, IRR, Step-Up) Debt Financing Status ost-Close Value Creation Plan Submit Your Deal Sponsor FAQ What types of deals are eligible for CapitalPad? CapitalPad supports acquisitions of established, profitable small and medium-sized businesses using the self-funded searcher or independent sponsor model.Deals must generally be under LOI and supported by strong historical profitability and a clear path to close.We are industry-agnostic but highly favor durable, “boring businesses.” We are typically more cautious on ecommerce or tech-related industries that are more prone to disruption.Representative examples include:Residential Home Services – Plumbing, landscaping, pool careConsumer Services – Auto repair, pet groomingMedical & Wellness – Mental health services, outpatient clinicsNiche Manufacturing – Custom fabrication, specialty producersDigital Services – IT providers, digital marketing agenciesBusiness Services – HR consultancies, accounting firms What is the cost? Raising capital on CapitalPad is always free for sponsors.We only earn carried interest from investors, and only after investors are profitable, keeping our incentives aligned with yours. Who are the investors? Our network includes approved accredited individuals, family offices, funds, and SBICs with experience in sponsor-led acquisitions. Who will see my deal? Once approved, a blinded teaser of your deal is shared inside CapitalPad’s curated investor network through our secure platform.Investors who express interest must sign an NDA and non-circumvention agreement before accessing the full deal materials and data room.Those who do not sign remain limited to the teaser only. Will my deal remain confidential? Yes. Investors only see a blinded teaser until they sign an NDA and non-circumvention agreement inside the secure platform.Without those agreements in place, they cannot access the full deal materials or data room. What materials do I need to submit? Sponsors should be prepared to provide:Accepted LOIDeal memoCompany overview and investment meritsFinancial package (P&L, tax returns, statements)Financial modelSources & uses of fundsInvestor terms (preferred return, IRR, step-up)Terms of the acquisitionStatus of debt financingPost-close growth / value creation plan How long does the review process take? Our team typically reviews submissions within 2-3 business days. You’ll receive clear feedback on next steps or approval to move forward. How long does it take to raise funds? Timelines vary depending on deal type, size, and investor demand.As a rule of thumb, the more time you allow, the more capital can be raised, so it’s best to start early.Some deals have been funded in as little as 14 days, but larger allocations almost always require additional time.Reach out on your deal if you have a specific need, and we can give feedback.l  How much capital can I raise through CapitalPad? CapitalPad can directly support investments from $250,000 to $1,500,000.Larger raises may be filled through a combination of our network and institutional partners, as CapitalPad can introduce larger independent sponsors to dedicated debt and equity capital providers to fill out equity gaps.Larger institutional partners are required to allocate at least $750,000 or more to be on our approved list. Does CapitalPad offer debt financing? No. CapitalPad focuses exclusively on equity investments.However, we maintain relationships with both SBA lenders for searcher deals and traditional debt providers for independent sponsor transactions.Contact us if you’d like an introduction. What investor terms do I need to offer? Investors expect market-standard economics that balance sponsor incentives with investor protections.Common structure for self-funded searchers:8-15% preferred return1x liquidation preference1.5x – 2.5x step upA conservative model with projected 30%+ IRR returns for investorsQuarterly distributions are preferred (and raise more), but are not requiredInvestors also prefer accelerated return of capital, although not requiredCommon structure for independent sponsors:A 1-2% closing fee, generally rolled into the dealManagement fee, usually up to 5% of trailing 12-month EBITDA (with a floor and ceiling)A scaling carried interest structure, with standard MOIC hurdlesA 6-10% preferred return hurdleCapitalPad generally wants to see a 30%+ IRR modeled on very moderate growthIndependent sponsor deals should largely be in line with the McGuireWoods Independent Sponsor Study How are investors pooled into one entity? All allocations from CapitalPad investors are consolidated into a single SPV (special purpose vehicle).This means the SPV invests directly into your deal, and you only send subscription agreements and wire requests to the SPV manager (CapitalPad). Sponsors avoid the complexity of managing dozens of individual investors.For larger institutional commitments ($750k+), investors typically invest directly rather than through the SPV.If SBA loan verification documents are required, CapitalPad collects and organizes them on your behalf. Can you help me find deals? Yes. While CapitalPad primarily supports post-LOI raises, we can connect qualified searchers and sponsors with vetted proprietary deal flow. What kind of support does CapitalPad provide after closing? Beyond capital, CapitalPad stays engaged post-close. We provide hands-on support to help sponsors grow and scale their new companies.This can include vetting service providers, leading website redesigns, scaling marketing efforts, or offering strategic guidance. When needed, we’re willing to roll up our sleeves and get involved. Where Searchers, Sponsors, & Capital Converge Get Started ### Deal Pre-Approval Form Interested in posting your deal on CapitalPad, but wondering if it would be a good fit?No worries. Fill out this form, and we'll happily open a conversation with you.(If the form embed is giving you trouble, here's a direct link.) ### Contact We’re here to help! Whether you have questions, feedback, or need assistance, our team is ready to provide the support you need. Send us a Message ### CapitalPad - SMB Investment Platform The SMB Investment Platform Connecting accredited investors with acquisition entrepreneurs to power the next generation of SMB ownership.Connecting accredited investors with acquisition entrepreneurs to power the next generation of SMB ownership. Join the Network Invest in SMB Acquisitions CapitalPad delivers accredited investors a highly curated pipeline of sponsor-led deals from proven acquisition entrepreneurs. See How It Works Raise Capital CapitalPad invests in searcher and independent sponsor deals. Connect with value-add investors, fund your acquisition, and build an enduring business. Fund Your Deal CapitalPad for Investors Invest in Profitable, Enduring Businesses Forget venture capital.CapitalPad only invests in historically profitable, cash-flowing companies led by motivated operators.Build a diversified, passive portfolio of legacy businesses with our curated pipeline of lower-middle market search fund and independent sponsor deals. See How It Works Disciplined Deal Selection CapitalPad reviews hundreds of opportunities and only invests in the rare few that meet our strict profitability and durability standards. Boring Is Beautiful Aggregate search fund returns have historically outperformed both venture capital and private equity¹. Simplified Investing CapitalPad makes it possible to build one of the only truly passive portfolios of small businesses. See How It Works Focused Capital CapitalPad only invests in searcher and independent sponsor deals, giving you a capital partner aligned with your model who can make decisions fast. Streamlined Closing One partner, one wire. Our structure pools capital into a single entity—simplifying your close. Aligned Partnership We’re invested in your success. Beyond the wire, our team brings SMB and private equity experience to help you build an enduring business. See the Process CapitalPad for Searchers Fund Your Acquisition CapitalPad invests equity in searcher and independent sponsor deals, bringing alongside a trusted network of funds, family offices, and accredited investors.Fill your equity gap and close with confidence. See the Process “As a long-time SMB investor, I've witnessed firsthand the incredible potential of the search fund model. However, I also saw how many talented searchers struggled to access the capital they needed, while countless investors were eager to participate but lacked access.” - Travis Investor & Founder, CapitalPad “CapitalPad makes the deal sourcing and logistics of SMB investing stupid easy - I've already joined my first deal and am excited for more!” Nigel Moore Author, Entrepreneur, Investor “CapitalPad's investment was invaluable for helping close our SMB deal. Highly recommended for self-funded searchers.” Brian Seeling Searcher A Platform Built From Experience Founded by a team with deep expertise in private equity and small business operations, CapitalPad combines institutional rigor with a passion for building enduring companies. For Investors Gain access to a carefully curated selection of search fund and independent sponsor opportunities. Participate in this overlooked asset class with confidence and clarity. For Operators Close with confidence. CapitalPad invests equity and brings a trusted network of investors, simplifying your raise and helping you secure the right partners. Track Record Our team's disciplined and modern approach, combined with deep experience, has resulted in dozens of successfully closed deals. FAQ What types of deals are on CapitalPad? CapitalPad’s Deal FocusCapitalPad backs acquisition entrepreneurs in lower middle market deals, where valuations remain attractive and competition from traditional private equity is limited.These acquisitions are led by acquisition entrepreneurs, who are generally classified as either a “self-funded searcher” or an “independent sponsor”. These operators acquire established, historically profitable SMBs — not startups or venture-style bets.Deals typically involve the acquisition of well-established companies with multi-year track records of profitability.Common examples of target deals on CapitalPad include:Home Services – HVAC, roofing, contractingConsumer Services – Garment care, towingHealthcare Services – Home health, physical therapy clinicsLight Manufacturing – Light, specializedDigital Services – IT firms, agenciesProfessional Services – accounting firms, consultancies, B2B providersCapitalPad gives approved, accredited investors the option to pool together capital to fund the acquisition, essentially partnering with the acquirer. In return, investors receive equity ownership and share in both ongoing cash distributions from operations and potential capital gains upon exit. FAQ for Investors Who can invest on CapitalPad?CapitalPad is only available to approved accredited investors, pending approval through our onboarding process.Can institutions invest through CapitalPad?Yes, CapitalPad is available for funds and family offices dedicated to the independent sponsor space (some restrictions apply). You can choose to sign up as an institution during onboarding.What is the minimum investment size?$25,000 per deal.How do investors participate in deals?Once approved, accredited investors gain access to the CapitalPad dashboard.Deals are posted only as opportunities arise, each with a detailed due diligence data room that includes:Summary teaserBusiness detailsSponsor profilesHistorical financialsTax returnsFinancial modelsInvestor termsValue creation planSearcher/Sponsor interviewInvestors review the materials and choose to co-invest on a per-deal basis.How liquid are these investments?Investments on CapitalPad are long-term and illiquid. While investors may receive cash distributions during ownership, most returns are realized when the company is sold. Illiquidity is what allows for disciplined growth and attractive returns.How does CapitalPad make money?CapitalPad is fully aligned with investors. We don’t charge management fees. We only earn a 20% share of profits after investors have received their full initial investment back. If a deal isn’t profitable, investors pay nothing. FAQ for Operators What are the requirements for self-funded searchers on CapitalPad?Target company should be established, historically profitable, and cash-flow positive.Minimum of $750k EBITDARaising at least $300kStrong preference for businesses with stable recurring revenue, essential services, or durable customer demandBased in North AmericaMust have a company under LOI to raise (CapitalPad does not provide seed funding for search vehicles)Strong operator backgroundLow customer concentrationLow cyclicalityWhat are the requirements for Independent Sponsors?Typical target size of $2m EBITDAMust have a company under LOI (or deep in diligence).Clear transaction path with a realistic timeline to close.Demonstrated track record of executing transactions (prior M&A, PE, or operator experience).Sponsor economics (carry/promote, fee structure) that are market-standard and aligned with investors.Does CapitalPad charge operators a fee?No — Operators, Searchers, and Sponsors do not pay a fee. CapitalPad is not a capital raising service.What types of businesses does CapitalPad invest in?CapitalPad is industry-agnostic but focuses on businesses with durable demand, low risk of technological disruption, and clear, proven profitability. No speculative startups or turnarounds.CapitalPad has become one of the top investors in the self-funded search fund and independent sponsor space by avoiding shortcuts, sticking to what we know, and consistently backing proven, enduring businesses.How quickly can CapitalPad commit capital?CapitalPad can provide a signal within days and commit capital in as little as two weeks. The more time you allow, the larger the potential commitment.What level of involvement does CapitalPad have post-close?It’s driven by the operator. CapitalPad can be a hands-on partner in certain deals or take a passive role in others. The level of involvement is entirely up to you. Investment Disclosures CapitalPad does not provide personalized investment advice or recommendations to any individual investor. All information provided through this website, including details related to potential investment opportunities, is for informational purposes only and is not provided by CapitalPad.Investors acknowledge and accept the inherent risks of investing in private securities, including the risk of 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, 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, and 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 Searchers, Sponsors & Capital Converge Get Started