The fundless sponsor model enables individuals to acquire and grow businesses without the need for a traditional private equity fund. Instead of securing pre-committed capital, these sponsors raise equity on a deal-by-deal basis, allowing flexibility and agility in the acquisition process. This model has gained traction, particularly in the lower middle market, where sellers are more receptive and valuations are lower. Experienced General Partners are adopting this model as it allows them to operate lean and establish trust through demonstrated value creation.
If you're a founder, operator or emerging investor, here's how you can scale like a private equity firm without ever raising a fund.
In simple terms, you find a good business to buy, lock in the terms with the seller and then bring in investors and lenders to finance the deal.
This model has exploded in popularity, especially for deals in the lower middle market where valuations are lower.
Even experienced GPs are shifting toward this model, allowing them to stay lean and focus on execution.
Collection
[
|
...
]