Buyout Funding - is a term used to
describe the type of funding or financing that a management team uses
to buyout the company they currently work for. For instance, senior
management that owns the company may be looking to retire and middle
management wants to purchase the company but does not have enough of
their own funds to make the purchase.
Reverse Merger Funding
is interested in funding middle management buyouts and is actively
seeking middle management teams looking to acquire the company they
currently work for. The acquisition should have at least $5,000,000 in
gross revenue, even if not yet profitable. Use this easy Funding Request Form and we will get back to you within 1 week to let you know our response and the next steps to be taken,
A
hedge fund or private investor may consider financing the acquisition
based on several key factors: (1) Is the middle management team
experienced enough to run the company once senior management leaves?
(2) Is the cashflow or net revenue sufficient to amortize the loan?
(3) Does the middle management team have any skin in the game?
There
are many different ways to structure buyout funding, but the most
common is probably a loan with an equity component. In other words the
loan has to get paid off over a period of time and the investor gets to
keep a portion of the business, which can be anywhere from 10% to 70%.
The more skin the management team has in the game (how much of their
own money did they put up) the less of a percentage the investor will
require to put up the capital for the buyout.