Seeded Sponsors: A Middle Ground Between the Bootstrapped Independent Sponsor and Committed Fund

Over the past 15 years, the meaning of the term "sponsor" in the private equity context has evolved to include several alternatives to the standard committed private equity fund model. These "nontraditional" or "alternative" sponsors have established their relevance in the lower-middle market and are even competing for – and winning – true middle market deals.

The authors of this article have previously published articles and alerts highlighting and describing various elements of "independent sponsor" and search fund transactions. In addition to seeing an increasing number of independent sponsors, self-funded searchers and traditional search fund-backed searchers as participants in lower-middle market transactions, there are also increasing instances of hybrid deal sponsorship models that fall somewhere in between a traditional committed private equity fund model and the independent sponsor/self-funded searcher models.

Click here to view this Holland & Knight article that provides a high-level overview of the emerging private equity sponsor model that the article's authors have labeled as the "seeded sponsor" model.

Holland & Knight is an active participant in the emerging manager space. The Independent Sponsors Team regularly represents sponsors, along with their equity investors and other financing partners, in their mergers and acquisitions (M&A) and other investment transactions across a range of industries, geographies and transaction sizes. We invite any interested parties to contact us for additional information.