Independent Sponsors
We counsel independent sponsors and their capital partners at every stage of the deal lifecycle, from sourcing and structuring through capital raising, execution, governance, and exit.
Every independent sponsor knows the firm that bills as if it deserves a promote. We are everything that firm is not.
Sponsor Services
Deal
Execution
Deal execution is the sponsor-side legal work that runs from the letter of intent through closing. We handle LOIs and exclusivity, purchase agreements, rollover structures, due diligence, governance, and coordinated execution across sellers, capital partners, and lenders. Learn about our M&A Practice.
Equity
Fundraising
Independent sponsors raise capital one transaction at a time. We structure and negotiate equity commitment letters, co-invest allocations, promote structures, fee arrangements, and investor rights so sponsor economics are preserved across every close. Learn more about our Fund Formation Practice.
Sponsor
Economics
Sponsor economics are the closing fees, management fees, and carried interest the sponsor earns for sourcing and executing the deal. We structure sponsor entities, promotes, carried interest, management equity, and fee streams so the economics are clear, defensible, and durable across deals and across a falling-out.
Debt
Financing
We understand that many independent sponsor deals require a coordinated debt package. We negotiate senior, mezzanine, or unitranche facilities, align covenants with the operating plan, and manage lender deliverables and timing.
Transitioning to Committed Fund
Many successful independent sponsors eventually raise a committed fund. Through our fund formation practice we advise on when the track record supports a fund, how to structure fund I economics against a deal-by-deal history, and how to manage the transition with existing capital partners. The firm that ran your deals can form your fund.
Ongoing
Counseling
Sponsors operate lean. We provide ongoing, practical support across contracts, portfolio-company matters, add-ons, risk management, and templates so you can scale your deal flow efficiently. Learn more about our Corporate and Commercial Services.
Proud partner of leading independent sponsor and ETA institutions
We are the independent sponsor counsel of choice for deal makers sourcing transactions from $10 million to $250 million, and for the family offices and institutional capital partners that back them.
| Dimension | Ebadat (boutique sponsor counsel) | BigLaw independent sponsor practice |
|---|---|---|
| Who negotiates your documents | The partner who signs the engagement letter drafts and negotiates the deal | The partner who pitched you is not the associate who drafts |
| Attention | We run a handful of sponsor deals at a time, by design | Hundreds of sponsor deals move through the practice every year; yours is one of them |
| Fee structure | Scoped or capped, agreed before the work starts, with real broken-deal sensitivity | Hourly across a leveraged team; the number arrives at closing |
| Legal spend on a $20M deal | A known number, agreed on day one, sized to the transaction | Bills on lower middle market sponsor deals can climb to a mid single digit percentage of the deal |
| Conflicts and independence | Free to take hard positions against any capital partner; no institutional relationships to protect | Sees the same capital partners across hundreds of deals, and will again next quarter |
| Sponsor economics | Promote tiers, vesting, forfeiture, and fees negotiated by the partner who priced them on the last deal | Deep market data, applied through whoever is staffed on your deal this month |
| Speed | Hours to same-day on LOIs, term sheets, and drafts | Turnaround set by team availability and internal process |
| Fund transition | Fund I structured and formed in-house at boutique economics | Handed to the fund formation group at BigLaw rates |
| Built for | Sponsors acquiring companies from $5 million to $100 million, and the platforms they build from them | Sponsor programs operating at institutional scale |
Our Independent Sponsor Practice VS Big Law
Acquire with intent.
INSIGHTS & STRATEGIES
Frequently Asked Questions
What are typical independent sponsor economics?
Economics vary by deal size, sector, and track record, but the commonly observed structure has three components: a closing fee often in the range of one to three percent of enterprise value, an ongoing management fee frequently tied to a percentage of EBITDA with a floor and cap, and carried interest commonly in the range of ten to thirty percent above a preferred return, often in tiers. Every element is negotiated, and the definitions matter as much as the headline percentages.
How do capital partners document independent sponsor deals?
Most capital partners document the relationship through a term sheet followed by the operating agreement of the acquisition vehicle, covering the equity split, sponsor promote and vesting, governance and veto rights, information rights, and exit provisions. Some institutional partners add separate fee or management services agreements. The operating agreement is where sponsor economics are actually won or lost.
How should a sponsor manage term precedent across deals with different capital partners?
Carefully, because your last deal is your next negotiation's starting point. Capital partners benchmark against the sponsor's prior terms, and a concession made for one deal-specific reason has a way of becoming the partner's expectation on the next transaction. The disciplines that protect the sponsor: document why deal-specific factors drove any off-market term, resist blanket most favored nation commitments that reach across unrelated vehicles, and keep the definitions of promote, hurdle, and fee consistent across deals so comparisons are made on your terms.
What happens to sponsor economics if the sponsor and capital partner fall out after closing?
Whatever the operating agreement says, which is why the removal and forfeiture provisions deserve as much negotiation as the headline promote. The terms that decide the outcome: how "cause" is defined for removal, whether the promote is vested or subject to forfeiture and on what schedule, what happens to management fees on removal, and whether the sponsor retains equity, information rights, and exit protections after stepping back. These provisions are negotiated at closing, when everyone is friendly, and invoked when they are not.
Can a sponsor take fees at closing without broker-dealer issues?
Closing fees and management fees paid to the sponsor for services to the acquired company are standard market practice. The securities law analysis sharpens where compensation is tied to raising capital: transaction-based compensation for placing other people's money can implicate broker-dealer registration, and the structure of the fee, the sponsor's role, and the exemptions relied on all matter. This is a question to resolve in deal structuring, not after a capital partner's counsel raises it in diligence.
When should an independent sponsor engage counsel?
Before signing the LOI. The LOI sets exclusivity, timing, and financing contingency terms that determine whether the sponsor can hold the deal while raising the equity. Engaging counsel after the LOI is signed means the most important leverage points have already been conceded.
What is the difference between an independent sponsor and a search fund?
A search fund raises a small pool of committed capital to fund the search itself, and the searcher typically becomes the CEO of the single acquired company. An independent sponsor funds their own sourcing, typically acquires multiple companies over time, and usually installs or retains management rather than operating the business personally.
Can you help an independent sponsor raise a committed fund?
Yes. Our fund formation practice advises sponsors on structuring fund I against a deal-by-deal track record, including GP economics, anchor investor terms, and regulatory setup. Many of our sponsor clients move between deal-by-deal and committed structures over time, and we handle both.
Do you represent capital partners as well as sponsors?
Yes, though never on the same transaction. Representing family offices and institutional partners in sponsor deals is part of what keeps our sponsor-side advice current: we know what the other side of the table is planning because we sit there too.
