Self-Funded Search Fund/Micro Buyout
| Inspiration & Strategy Overview: Twitter thread by Brandon Laughridge | | | | | | | | | Blue cells are inputs |
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Instructions: Feel free to create your own editable version of this spreadsheet by going to "File" > "Make a copy." The blue cells are the inputs (i.e. everything else should update automatically).
| This is just a hypothetical example for educational purposes only. If you see any mistakes, have questions, or have any other feedback, feel free to reach out on Twitter: | | | | | | | | | @bschaf12 |
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| Deal Terms | | | Financing | | | | | | Sale Terms | | | Results |
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| EBITDA | 800,000 | | Type | Percentage | Amount | Interest Rate | Term (Years) | | Sale Multiple | 4.25 | | Party | ROI | IRR | MOIC |
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| Purchase Multiple | 4.00 | | SBA Loan | 85% | 2,720,000 | 6% | 10 | | Sale Year | 7 | | Equity Partner | 653.9% | 171.3% | 7.54x |
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| Purchase Price | 3,200,000 | | Seller Financing | 10% | | | | | Remaining Debt | 1,051,015 | | Majority Owner | | | |
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| Tranche 1 | 5% | 160,000 | 6% | 10 | | Seller Tranche 2 Payoff | 240,581 |
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| Tranche 2 | 5% | 160,000 | 6% | 11 | | Broker Comm | 8% |
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| Operating Assumptions | | | Equity Partners | 5% | 160,000 | | | | Legal & Acct | 50,000 |
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| EBITDA Growth Rate | 3% | | Repayment Terms: Majority owner will take no distributions until equity partners have received 5x return of capital. |
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| Capex/Reinvestment/Req'd WC | 15% | | | Return of Cap Multiple | 5 | | | OK |
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Year
| EBITDA | 824,000 | 848,720 | 874,182 | 900,407 | 927,419 | 955,242 | 983,899 | 1,013,416 | 1,043,819 | 1,075,133 | 1,107,387 | 1,140,609 | 1,174,827 | 1,210,072 | 1,246,374 |
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| SBA Debt | (362,371) | (362,371) | (362,371) | (362,371) | (362,371) | (362,371) | (362,371) | (362,371) | (362,371) | (362,371) | 0 | 0 | 0 | 0 | 0 |
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| Seller Financed Debt | (21,316) | (21,316) | (21,316) | (21,316) | (21,316) | (21,316) | (21,316) | (21,316) | (21,316) | (21,316) | 0 | 0 | 0 | 0 | 0 |
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| Reserves for Standby Equity (Tranche 2) | (27,612) | (27,612) | (27,612) | (27,612) | (27,612) | (27,612) | (27,612) | (27,612) | (27,612) | (27,612) | (27,612) | 0 | 0 | 0 | 0 |
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| Capex/Reinvestment/Req'd WC | (123,600) | (127,308) | (131,127) | (135,061) | (139,113) | (143,286) | (147,585) | (152,012) | (156,573) | (161,270) | (166,108) | (171,091) | (176,224) | (181,511) | (186,956) |
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| Net Distributable Cash Flow | 289,102 | 310,114 | 331,756 | 354,048 | 377,008 | 400,657 | 425,016 | 450,105 | 475,947 | 502,565 | 913,667 | 969,517 | 998,603 | 1,028,561 | 1,059,418 |
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| Equity Partner Distributions | 289,102 | 310,114 | 200,785 | 35,405 | 37,701 | 40,066 | 42,502 | 45,011 | 47,595 | 50,256 | 91,367 | 96,952 | 99,860 | 102,856 | 105,942 |
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| Majority Owner Distributions | 0 | 0 | 130,971 | 318,643 | 339,307 | 360,591 | 382,514 | 405,095 | 428,353 | 452,308 | 822,301 | 872,566 | 898,743 | 925,705 | 953,476 |
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| Cumulative Equity Partner Distr | 289,102 | 599,215 | 800,000 | 835,405 | 873,106 | 913,171 | 955,673 | 1,000,683 | 1,048,278 | 1,098,535 | 1,189,901 | 1,286,853 | 1,386,713 | 1,489,569 | 1,595,511 |
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| Remaining Return of Capital | 510,898 | 200,785 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
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| Seller Standby Equity (Tranche 2) Payoff | | | | | | | (240,581) |
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| Remaining Debt | | | | | | | (1,051,015) |
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| Broker & Professional Fees | | | | | | | (384,526) |
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| Net Proceeds | 0 | 0 | 0 | 0 | 0 | 0 | 2,505,450 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
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| Equity Parter Sale Proceeds | 0 | 0 | 0 | 0 | 0 | 0 | 250,545 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
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| Majority Owner Sale Proceeds | 0 | 0 | 0 | 0 | 0 | 0 | 2,254,905 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
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| Cumulative Distributions (Eq Ptr) | | | | | | | 955,673 |
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| Cumulative Distributions (Majority) | | | | | | | 1,532,026 |
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