Is it standard for the independent sponsor to take a management fee (~3-5% of EBITDA) when the seller is rolling over? Particularly if the seller stays involved, it seems like they would push back
Good question... PE typically gets a management fee on the assets they raise in a dedicated fund. Given that independent sponsors don't have a dedicated fund, it is common for them to get a management fee from the acquired company. A fee of 3% - 5% is common, but a negotiated point. I've seen some take a lower fee on the existing ebitda and a larger percentage on the improved ebitda.
This is a super important thing to think about - most entrepreneurs don't want a boss: 1. Private Equity - you probably don't have a day to day boss. 2. Holding Company - you probably don't have a day to day boss. 3. Assumed into a bigger agency and your brand disappears - you 100% have a boss. (As a 2x exiter...do number 1 & 2)
Interesting concept but their marketing is woke garbage ....let's see what kind of social justice warriors have the actual ability to be an overnight ceo.
Or... you could do more research before you comment on the experience of the CEO and the support system provided before you make an uninformed comment and hide behind a blank photo and unidentifiable name ;-(
