If I could invest in a series of small businesses under the following structure I’d be PUMPED and would start doing a lot of it:

Founders: tell me if this is one-sided

Investors: tell me if this is stupid

Thinking out loud...

Here goes:

I (the fund) put up 90% of the cash needed to buy a service biz.

Owner co-invests 10%.

Owner PGs loan.

Owner is put on market salary ($50-100k).

Owner gets 20% of net profit.

I get 80% of net profit until I’ve returned 2x original invested capital.

50/50 on all profit after that.

New invested capital gets put on same terms.

Owner must:

Go all check / credit payments (no cash)

Use the funds preferred (in house) accountant, digital marketer, payroll co, staffing agency, web developer, CTO. COO. Call center.

Attend weekly 30 minute calls with me to check on progress, action items, etc.

Tweaks:

No PG from owner or anyone else.

75% seller financed (yes the deals are out there).

Owner is a hand selected state school fresh college grad.

Target is acquiring businesses in the $50-500k EBITDA size range.