Three schools
Three vehicles, three careers.
Self-funded search, investor-backed search and the independent sponsor path are different careers, not three ways to finance the same deal. The vehicle you choose determines your destination, so the school is organized by vehicle.
School ITraditional SearchThe investor-backed model: a searcher raises a small pool of capital from a group of investors to fund a two-year search, then those investors fund the acquisition and the searcher runs the company for a stake that vests over time. It is the best-measured vehicle in the field and the least representative of how most small businesses change hands.85 lessons in this schoolSchool IISelf-Funded SearchThe majority vehicle: one buyer, an SBA 7(a) loan for most of the price, a seller note, a small equity injection, and an unlimited personal guarantee. It is the way most small businesses actually change hands and the one with the least published outcome data. This is the school the founder built from his own failure.106 lessons in this schoolSchool IIIIndependent SponsorDeal-by-deal capital: the sponsor finds and underwrites the company first, then raises the equity for that specific deal, earning fees and carried interest rather than running it as the sole owner. It is the second act for many operators, the vehicle the founder rebuilt in, and the one this school treats as graduate work.52 lessons in this school