🟠 "What's an independent sponsor?" - with 3 independent sponsors based in Austin, TX

The SMB Scoop is highlighting 3 independent sponsors all based out of Austin, Texas this issue.

What's an independent sponsor? An individual or capital group seeking to acquire a company, who raises equity capital on a deal-by-deal basis (sometimes called 'unfunded private equity firms' or 'fundless sponsor'). The people in this asset class tend to come from 'deal' backgrounds: finance, investment backing, private equity. Most independent sponsors target lower middle market companies in the $4M to $15M EBITDA range.

Many independent sponsors turn into funded private equity firms as they scale through their experience or track record. Some stay independent sponsors forever due to the flexibility & opportunity for higher deal-by-deal upside.

Want to learn more about the economics of this structure, then check out the McGuire Woods report on independent sponsor economics and structure. This is the bible for seeing what 'market terms' are for an independent sponsor.

Below are profiles of 3 independent sponsors based in Austin Texas. All 3, I would consider friends and GREAT people.

Drew Bagot of Serta Capital

Drew Bagot is an independent sponsor at Serata Capital Partners based out of Austin, TX. One of my favorite portfolio companies of his is Fusion 92, a marketing company, that I'm also an investor in. He recently recorded an awesome podcast about 'Understanding the Advantages of an Independent Sponsor'.

Stenning Schueppert of Evolution Strategy

Stenning Schueppert is an independent sponsor at Evolution Strategy in Austin, TX. Stenning used to be my boss back in the day - I learned an incredible amount about deal making during my time apprenticing with him. I wouldn't be where I was without him. Stenning has portfolio companies in landscaping and infrastructure construction.

Thomas Ince of LP First Capital

Thomas Ince of LP First Capital has acquired & continued to build out 7+ sizable platforms in a number of different sectors but a clear preference for a buy-and-acquire strategy, starting with initial platforms of $3M to $10M EBITDA. Portfolio companies include landscaping, collision repair, commercial and residential HVAC, and vocational training. Check out the portfolio here. Thomas has a unique perspective having started out his career as a dentist, transitioned to entrepreneurship owning and exiting an education platform, then built out an independent sponsor group.

Thomas is actively sharing his thoughts on Twitter, you can follow him here.

Check out my SMB Capital Connector:

-For investors seeking passive small business investments (with good sponsors)-For entrepreneurs seeking to raise acquisition capital from 400+ accredited SMB investors.

Ben Tiggelaar

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