HBR Guide to Buying a Small Business

CHAPTER 19

Raising Acquisition Equity

If your prospect is a good acquisition opportunity, you should be able to quickly raise the equity you need to complete the transaction. If you have never raised a million or more dollars of equity before, this statement probably seems surprising, but it’s true; there are many more people trying to invest capital than there are good investments. It’s hard for most high-net-worth investors—the owner of a successful midsize business, a partner in a large law firm, and so forth—to gain access to private-equity investments. That means there are investors interested in providing equity to fund about one-third of your total purchase price—as long as the promised payoffs are high enough to reward them for the risks ...