Independent sponsor equity What makes this structure popular in today’s Credo Private Capital was formed to provide small business owners and management teams access to an investment partner that does not have the constraints associated with traditional private equity. Derek McDowell, a one-time Independent Sponsor and veteran of more than 25 years in the private equity industry, is Managing Partner for Miami-based Boyne Capital Partners. Most members have a background in private equity, corporate development, industry/operational experience or investment banking. The video provides an introduction to the independent sponsor (aka fundless sponsor), and explains certain advantages dealmakers have over their competition. The table below presents a side-by-side comparison of the key economic and governance terms in arms-length lower-middle market M&A transactions. Find senior lenders, mezzanine funds, and credit partners supporting lower middle market sponsor-led acquisitions. Partner with Hadley If you’re an experienced independent sponsor seeking a value-added equity partner to complete your next transaction, the Hadley Independent Sponsor Alliance could be your ideal solution. We have partnered with independent sponsors in three investments in our current fund: Arch Global Precision, Acme Cosmetic Components and EnviroScience. While there’s great promise for those with the ability to navigate the steps it takes to find success, it takes a great deal of motivation and persistence, and… Join the Independent Sponsors Summit & Awards in Miami on March 12-13, 2026 to connect with industry leaders, explore investment opportunities, and enhance your deal-making strategies. The fundless sponsor identifies a target firm and then looks for equity-capable investors to help buy the business. Whereas previously independent sponsors were considered limited to lower-middle-market transactions, private Despite their relative novelty, they are acknowledged by private equity associations as a separate asset class. Based on the results of more than 300 responses covering transactions that were closed in 2021, 2022 and 2023, this survey is the largest and most Oct 11, 2023 · Commonly, independent sponsors are former private equity experts or investment bankers who want equity ownership and involvement in the growth and operations of a company. They’re called this because they do not have a fund of committed capital like a traditional private equity fund. This model has gained traction among experienced professionals in private equity and investment banking looking to execute acquisitions on a deal-by-deal basis using SPVs. As a fund-less deal negotiator, the Independent Sponsor must rely on others for the capital to close deals. 11k+ deals/year on our matching platform. The independent sponsor recognizes a target company and then seeks an investor that can provide equity to acquire the company. Aug 25, 2023 · In 1998, Scott Dickes left his job as a vice president at a private equity firm and embarked on the quixotic journey of a fundless sponsor. Traditional private equity raises a fund, usually closed-end (meaning it has a finite life to make investments and return capital to investors), from which the fund managers (the private Most independent sponsors have a background in private equity, investment banking, general management or consulting. Register now for exceptional networking. Corridor provides debt and equity, works quickly, ensures transparency and respects Aug 22, 2024 · We are thrilled to release the 2024 list of the Top 20 Independent Sponsors on Axial! In the past year, Independent Sponsors have solidified their position as key players in the M&A landscape. This post gives an overview of the independent sponsor model of business acquisitions and highlights the differences compared to private equity and self-funded search funds. Instead, they aim to acquire businesses without raising capital in advance, lining up investors on a deal-by-deal basis. Learn how the entrepreneurs of private equity leverage the fundless or independent sponsor model to grow businesses and create wealth. Sep 23, 2025 · Curated list of the top independent sponsor investors and capital providers. In each case, our capital structure allows for creative financing solutions that work for everyone involved, and oftentimes the ability to get deals done others can't. Access Capital Partners is the preeminent investment bank for fundless or independent sponsors. Independent sponsors focus on sourcing and financing buyouts without taking on operational responsibilities, offering an alternative for seasoned professionals in deal-making. A fundless sponsor (or “independent sponsor,” per a more recent conceptual rebrand) is an investor that pursues a deal without the security of the committed capital in a PE fund. Oct 18, 2025 · Explore CapitalPad’s curated list of independent sponsor debt providers. How do independent sponsors make money? This post will cover the (1) closing fee, (2) management fee, (3) and carried interest. . Indy Sponsors usually take down deals between $2m-$10m EBITDA, with some outliers. Although the specifics of this model aren’t widely publicized, its increasing adoption by institutional investors, family Independent private equity firm based in Santa Monica, California. Evidence of expansion is an increasing number of independent sponsors participating in not only lower middle market deals, but in larger middle market transactions alongside Apr 23, 2023 · Independent sponsors turn to a wide range of capital sources, including committed capital PE funds, wealthy individuals, family offices, fund of fund investors, insurance companies, endowments, lenders, and hybrid equity/debt investors. Become A Member The Independent Sponsor Forum is designed to help Independent Sponsors access the capital, connections, knowledge and deals they need to be successful in today’s rapidly evolving capital markets. Jun 2, 2025 · Independent sponsors are private equity firms without traditional closed-end funds. Working with an independent fundless sponsor may be a good option for a business that has been struggling to negotiate more attractive terms with established private equity investment firms. Since then, we have released five additional reports, each capturing the sector's ongoing development. It should be noted here, however, that searchers will often Jan 22, 2024 · An independent sponsor, often referred to as an “independent equity sponsor” or “fundless sponsor,” is an individual or group that identifies and structures private equity investment opportunities without having committed capital from external investors in advance. The independent sponsor structure avoids using a private equity fund such as pension or family funds and, instead, directly invests in the project. The independent sponsor model is highly flexible and constantly evolving, as are the ways that sponsors are compensated for their efforts. Raising both debt and private equity capital, we are a turn-key financing solution for new and experienced fundless sponsors. Mar 26, 2025 · Levenfeld Pearlstein’s Independent Sponsors team provides comprehensive legal services to independent sponsors and their capital providers, delivering tailored, strategic legal solutions to drive successful outcomes. Many independent sponsors… 2 days ago · As the Independent Sponsor community grows both in size and impact, there are a growing number of executives transitioning from private equity to the independent sponsor/deal-by-deal model. We regularly represent independent sponsors in connection with all facets of their acquisition transactions. We partner with independent sponsors to source investment opportunities. For those seeking to scale the independent How independent sponsors are compensated in a private equity transaction. Boyne Capital successfully transitioned from an independent sponsor into a committed-capital private equity firm. For information on past conferences and McGuireWoods’ commitment to the independent sponsor community, visit our thought leadership and related events tabs, respectively. 100% free for sponsors to use. Podcasts also are available Dec 1, 2020 · The independent sponsor (formerly known as “fundless sponsors”) is an equity sponsor that seeks to purchase (generally) privately held business with the backing of investors. At Sadis, our legal team is deeply experienced in guiding independent sponsors through all stages of their deals, from structuring agreements to securing capital providers and ensuring compliance. Understand their unique structures, risks, and benefits. The combination of an independent sponsor and a funding source with committed or available capital can be mutually beneficial to both parties. Focused exclusively on raising debt and equity capital for independent sponsors' acquisitions and recapitalizations, ACP has developed a refined approach to structuring transactions, positioning sponsors and targeting independent sponsor capital providers. Seneca takes a highly collaborative approach to its investment strategy and has partnered with a variety of investors and types of capital partners, including family offices, private equity funds, SBICs, asset managers, independent sponsors and others. These sponsors come from all areas of the market: spinouts from private equity firms, former investment bankers, or operators-turned-investors. An independent sponsor, also known as a fundless sponsor or an unfunded sponsor, is an individual or group that identifies and structures investment opportunities in collaboration with financial backers. In this video you will learn more about the individuals involved in the process of sourcing, structuring and closing transactions. CapitalPad connects independent sponsor deals with dedicated capital providers. Specialties: The attorneys on our Independent Sponsor Team have specific experience with the complexities that independent sponsors face in structuring and effecting transactions as an independent sponsor, and the unique priorities of independent sponsors compared to a standard middle market private equity fund. We are a growth-oriented partner that leverages our experience and resources with the goal of givingu2028the most important deal in your career the best chance for success. Independent Sponsors and Private Equity firms can make for a formidable acquisition team. Independent Sponsors vs. A Channel in Evolution Over the past decade, the independent sponsor model has become increasingly prevalent in the lower middle market, with investors interested in private companies actively seeking to co-invest with prominent or promising sponsors as a supplement to direct, brokered, or other deal flow channels. Oct 10, 2024 · In the world of private equity, a significant shift is emerging with the rise of the independent sponsor model. Private equity professionals who want to transition from the committed capital model to a deal-by-deal model, often allowing them to be more involved in the deal and benefit from greater financial incentives. Jul 15, 2025 · Once peripheral, the independent sponsor model is now central to lower middle market private equity. Align Collaborate is an equity investor dedicated to supporting independent sponsors. Apr 2, 2018 · Independent sponsors (also known as fundless sponsors) have evolved into a significant group of acquirers, competing with traditionally funded private equity firms and strategic buyers for transactions. The right equity providers bring strategic experience and industry contacts to the platform/portfolio company and can help drive value and operational efficiencies. Detailed profiles, criteria, and insights for sponsors raising equity in 2025. Our group understands the nuances of independent sponsor deals, including the simultaneous workstreams and constituencies that independent sponsors need to manage, and we go beyond simply applying middle-market private equity knowledge to these complex transactions. PE firms raise blind pools of capital in advance, meaning they don’t have to scramble for funding on a deal-by-deal basis. Why the Independent Sponsor is Emerging as an Attractive Option for Sellers, Individual Investors and Even Private Equity Funds By: Douglas Hendrickson Jul 13, 2022 · Over the past five years, independent sponsors have gained a strong toehold in private equity, particularly in the low-to-middle market, where investments are often less competitive. Kirtland can support independent sponsor led transactions as the control-equity investor. Member Benefits: Priority access to member-only Simplify your equity raise. 48% year-over-year increase in Independent Sponsors using the platform. Oct 12, 2018 · The independent sponsor business model combines the rigor of traditional private equity with deal-by-deal investments and economics. INDEPENDENT SPONSOR TRANSACTIONS STUDY (Based on Katten’s 2015 Representative Transactions) AUSTIN Jun 4, 2025 · To help businesses, investors, and deal professionals better understand the evolving independent sponsor landscape, Robert Connolly – a partner in LP’s Corporate Practice Group and leader of Apr 1, 2025 · Whether you’re an operator with deep industry expertise, an investment banker or private equity professional interested in acquisition entrepreneurship, getting started as an Independent Sponsor isn’t easy. The great turnout always leaves me with new value-added relationships so I can continue to grow my network and deal flow. This is especially true in the lower-middle market where Independent Sponsors’ strengths lie, and opportunities abound for smart deal makers. 421 Independent Sponsors are actively sourcing on Axial, up from 314 this time last year (+34%). Please contact the authors of this deal study with any questions regarding the findings or the underlying survey data. Why are independent sponsors growing in prominence? Both sellers and investors like What Is A Fundless Sponsor? An individual or capital group attempting to acquire a firm without the necessary upfront equity funding is known as a Fundless sponsor, sometimes an Independent sponsor. The independent sponsor sector was largely uncharted, with no established playbook. We define an independent sponsor as a private equity investor who is raising capital for investment opportunities on a deal-by-deal basis, typically before raising a committed fund. Independent sponsors need to be careful, however, to avoid structuring transactions that could cause them to lose control or influence. Unlike the traditional private equity structure, which requires a commitment to a blind pool of capital for a set duration, the independent sponsor approach offers greater adaptability, active operational involvement, and meaningful alignment with investors and portfolio companies. Much has changed since May 15, 2025 · When an independent sponsor structures its offer in connection with a Transaction, it is important to consider whether it wants to include rollover equity in its offer, as well as the impact that rollover equity specifically, and the acquisition structure generally, has on the desired tax treatment for both purchaser and seller. We share asset-level advisory fees and can provide broken deal cost protection. S. Discover insights on options trading, dividend investing, saving tips, and starting a business to achieve financial independence. This video is Part 4 of an introduction to private equity. In contrast to a private equity fund, an independent sponsor sets out to source an acquisition target (business for sale), and then raises the funds to complete the acquisition. Recently named "Law Firm of the Year" in Mergers & Acquisitions magazine’s Mid-Market M&A Awards, and ranked No. Apr 28, 2025 · This M&A Monday, we are discussing the structure and financing of an Independent Sponsor deal (called, Fundless Sponsor, or my favorite, Indy Sponsor). That said, one of the greatest challenges deal-by-deal investors face is how to land a great capital provider who will be a true partner, aligned… Feb 6, 2025 · The ecosystem and number of debt and equity investors and independent sponsors flooding into the space is voluminous. Feb 28, 2025 · Independent sponsor conferences are a great way for sponsors and capital providers in the private equity industry to meet and discuss deals. Private Equity Firms Independent sponsors operate similarly to PE firms with one primary exception – instead of raising capital in advance in the form of a fund from a group of investors, they first locate a potential acquisition and then seek to raise the equity capital. Serata Capital Partners is an independent private equity sponsor in Austin, Texas focused on investing in companies with $6MM+ of EBITDA that are looking for true partners toward accelerating growth. Oct 17, 2023 · Though mergers and acquisitions (M&A) activity has slowed as of late, particularly with regard to private equity deals, the independent sponsor segment of private equity has continued to expand over the past several years. There is often a blurring of the lines between independent sponsors and searchers engaged in a traditional search as participants in lower-middle market mergers and acquisitions transactions. How an independent sponsor gains company control absent a majority equity stake or controlling interest in the company acquired. At CohnReznick, we forge deep and trustworthy relationships with independent sponsors, facilitating and contributing to their success. Contact us now! 194 New York Independent Sponsors with recent deal activity. Ice Miller represents independent sponsors in connection with all aspects of independent sponsor transactions (including M&A, equity raise, and borrower-side finance). Independent sponsors—investors who acquire companies without committed fund capital, instead raising equity on a deal-by-deal basis—have grown significantly in number and credibility. This can be achieved by an individual or a team of people working to raise capital on a deal-by-deal basis. Independent private investment firm with a long history of equity investing in lower middle market companies alongside experienced Independent Sponsors. Our expertise ensures our clients maximize value “Deal-by-Deal,” a McGuireWoods podcast, explores all aspects of private equity deal-making in the middle market and lower-middle market, with an emphasis on the independent sponsor model. The latest data from Axial highlights this trend, showcasing a 28. Larger private equity firms often avoid these target companies due to the complicated process of acquiring such businesses and the relatively small equity checks required. Join funds, sponsors, owners, and advisors. Sep 23, 2025 · Independent sponsors, often referred to as fundless sponsors, raise equity capital on a deal-by-deal basis rather than from a committed fund. Independent Sponsors As a segment of private equity growing in size and relevance, independent sponsors face a variety of unique challenges, including sourcing transactions, raising capital, and managing resources. In short, they are individuals with exposure to transactions and / or operations. Jun 27, 2020 · Fundless sponsor models are often seen as less restrictive and more flexible than funded models such as traditional private equity investments. Having a working relationship with a PE firm provides 1300 United States Independent Sponsors with recent deal activity. Instead, they seek funding The Independent Sponsor Model represents the evolution of the traditional private equity model, whereby talented private equity sponsors aim to identify, acquire, grow and exit a business for a profit, while avoiding some of the traditional private equity pitfalls and barriers to entry. Feb 4, 2025 · Learn the key differences between the Independent Sponsor Model and Traditional Search Funds. Jun 2, 2025 · What Independent Sponsors Need to Know As an Independent Sponsor there are an almost limitless number of landmines to navigate to get a deal capitalized and across the finish line. Rockwood partners with operators and independent sponsors, offering capital, strategic resources, and fair collaboration to close deals and drive growth. Over the last three years, Independent Sponsors have been one of the top three highest growth segments on Axial. Their goal is to source deals – usually proprietary and out of the scope of the big banks – from founders or family owners. Aug 19, 2024 · In recent years, Independent Sponsors have emerged as a formidable force in the M&A economy. A typical timeline for an independent sponsor starts when a PE Blackmore Partners is a specialty independent investment firm that invests in lower-middle-market businesses alongside high-achieving senior operating executives with deep industry expertise and strong market relationships. Self-funded searches emphasize flexibility and higher equity retention but require greater personal risk during the search phase. Unlike traditional structures that require large funds or complex hierarchies, independent sponsors offer an agile, tailored, and deeply human approach to doing business. We work directly with companies, through intermediaries, in conjunction with fellow private equity and independent sponsors, and alongside operators. We provide pragmatic We believe in the critical role of quality independent sponsors. However, as opposed to private equity funds, independent sponsors do not have access to pooled cash reserves and therefore must seek investors on a deal-by-deal basis. M&A transactions up to $50 million, McGuireWoods is frequently recognized for its innovations in the independent sponsor market. Potential capital partners include all major segments of the private investor Jan 6, 2025 · Align for Success: Benefit from a transparent, fair economic structure that prioritizes long term outcomes over short-term wins. The discussion below describes who independent sponsors are, how they compare to traditional private equity firms and why sellers would consider selling their business to an independent sponsor Overview The independent sponsor finance vertical focuses on providing comprehensive “one-stop” solutions for independent sponsors seeking both debt and equity financing for acquisitions and recapitalizations. Oct 22, 2025 · Independent sponsor activity remains a force in the strong M&A environment. McGuireWoods private equity partners Jef Brooker, Greg Hawver and Jon Finger presented a Aug 16, 2021 · Independent sponsors sometimes work with private equity funds or family offices as sources of equity capital. The Penstock Equity team consists of experienced private equity capital investors who understand the unique needs of independent sponsors. Aug 28, 2025 · Independent sponsors, also called fundless sponsors, are individuals or small teams looking to acquire established small businesses. Finding reliable investors who participate in these transactions, such as family offices, private equity firms, and specialized capital providers, is often a challenge. Seven years ago, Citrin Cooperman published our first Independent Sponsor Report, exploring what was then considered the "Wild West" of private equity. It should be noted here, however, that searchers will often Apr 10, 2024 · An independent sponsor's rights largely depend on the motivations of its equity providers. The independent sponsor model has emerged as a legitimate alternative to traditional PE funds. With that, many more independent sponsor deals have been done and reviewed by 2024 Independent Sponsor Report Seven years ago, Citrin Cooperman published our first Independent Sponsor Report, exploring what was then considered the "Wild West" of private equity. Independent sponsors who have a strong following from institutional investors (often including existing private equity funds) and/or have a demonstrated history of closing investments using the independent sponsor model, have gained significant credibility in dealmaking, even if not on parity with traditional private equity. The conclusion covers a brief comparison of the McGuireWoods’ survey is the largest of its kind, and this deal study is the firm’s most comprehensive analysis to date regarding market terms in independent sponsor transactions. Please watch highlights from last year’s conference below. Independent sponsor transactions are an increasingly popular model for private equity professionals seeking flexibility and strategic partnerships. Independent sponsors generally fall under one or more of three categories – experienced operators, private equity professionals, and other industry veterans with sector-expertise and access to “off-market” deals. Gathering people with aligned business interests together at an industry event naturally encourages networking and making connections—precisely what independent sponsors often need most. Corridor is a high integrity, collaborative, operationally transformational partner with a track record of working successfully alongside several independent sponsors. Find capital providers for unique situations and complex deals. iGlobal Forum's Independent Sponsor Summit is a great event with lots of senior-level decision makers from lower middle market firms. Sep 16, 2025 · Discover the most flexible independent sponsor equity investors offering creative deal structures and adaptable investment terms. Feb 25, 2025 · How Independent Sponsors Differ from Traditional Private Equity Firms The biggest distinction between an independent sponsor and a traditional PE firm is capital certainty—or rather, the complete lackof it. What is an independent sponsor (aka fundless sponsor)? In contrast to a private equity fund, an independent sponsor sets out to source an acquisition target (business for sale), and then raises WHAT IS AN INDEPENDENT SPONSOR? The independent sponsor—also known as a fundless sponsor, or a pledge fund—dif-fers from traditional private equity primarily in the source and commitment of its capital. Independent sponsorship appeals to individual investors who have more business acumen and industry insight than investment capital. Independent sponsor economics aren't typically advertised by capital providers, but as the independent sponsor model has gained traction and momentum in the eyes of institutional investors, family offices and the private equity community, sponsors and capital providers alike are searching for guidance and data on fundless sponsor economics and compensation packages (transaction fees Oxer Capital partners with private equity firms, independent sponsors, family offices, and management teams to provide junior capital. Monroe offers independent sponsors an efficient path for raising capital and a high degree of certainty in completing transactions. What is an independent sponsor? In contrast to a private equity fund, an independent sponsor sets out to source an acquisition target (business for sale), and then raises the funds to complete the acquisition. Who Are Independent Sponsors and Why Do They Choose the Independent Sponsor Model? Independent sponsors generally come from three main areas. Unlike traditional private equity firms that raise capital for specific investment funds, independent sponsors do not have committed capital at the outset of a deal. Much has changed since our initial report in 2017, and Independent sponsors, a subset of lower middle market managers, raise capital on a deal-by-deal basis and typically target smaller family- or founder-owned companies that are less than $10mm EBITDA at investment. Penstock Equity is a provider of equity capital focused exclusively on independent sponsor-led transactions. Jul 1, 2025 · An Independent Sponsor—also referred to as a fundless sponsor or pledge fund—is an individual or group that seeks to acquire a business without having committed equity capital in advance. Most independent sponsors 2024 Independent Sponsor Deal Survey – Summary and Analysis McGuireWoods is pleased to share the results of its 2024 Independent Sponsor Deal Survey, offering a comprehensive analysis of prevailing trends in independent sponsor-led transactions. The independent sponsor model has evolved from being a marginal figure to becoming a strategic component of the private equity ecosystem. In addition, Independent Sponsors accounted for 31% of all The independent sponsor—also known as a fundless sponsor, or a pledge fund—differs from traditional private equity primarily in the source and commitment of its capital. As the independent sponsor model becomes more mainstream, many talented individuals with backgrounds in finance are increasingly forming their own independent sponsor groups to take advantage of this exciting new model. 1 in Thomson Reuters’ league table for U. Because There is often a blurring of the lines between independent sponsors and searchers engaged in a traditional search as participants in lower-middle market mergers and acquisitions transactions. vnyfm ejsrjd hsbv sannbt vsn ljdw fqekfq dfju zytrobv gombs wwef blxc snenumv ghyq zsb