Partnerships & Investors
How do investor partnerships work?
Investor funds the deal, operator runs it, both share in upside.
Practical Explanation
Investor partnerships are a structured version of the 'money + experience' pairing. The investor capitalizes the deal, the operator runs the business and vests into equity, governance is shared through the operating agreement, and profits are split per the agreed waterfall. The model scales from single-acquisition deals to multi-business roll-ups.
Real-World Example
Investor puts in $400K equity on a $2M acquisition (rest is SBA). Operator vests into 25% over 4 years and earns a $120K base salary.
Typical cash required
Investor: majority of equity. Operator: little to none.
Experience required
Operator brings the operational track record.
Advantages
- ✓Larger deal sizes accessible
- ✓Each party plays to strengths
- ✓Real ownership for the operator
Risks
- !Governance disputes
- !Operator turnover
- !Exit timing mismatch
Frequently Asked Questions
How long until exit?
Typical hold is 5–7 years for operating-business partnerships.
Related guides
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