CapitalPad supports acquisitions led by independent sponsors in the lower middle market, where investor demand is strongest and deals are most actionable. We focus on opportunities with smaller enterprise values, fragmented competition, and room for professionalization.

Deals must generally be under LOI, supported by demonstrated historical profitability, and structured with a clear path to close.

While CapitalPad is industry-agnostic, we emphasize durable sectors with recurring revenue, fragmentation, and consolidation potential.

Representative focus areas include:

• Business Services – Outsourced services, testing & inspection, staffing, marketing, and back-office functions
• Healthcare Services – Physician practice management, behavioral health, home health, hospice, dental, and veterinary practices
• Industrial / Niche Manufacturing – Precision machining, aerospace & defense suppliers, engineered components, specialty chemicals
• Consumer Products & Services – Food & beverage, pet products, franchising, fitness, and education services
• Infrastructure & Facilities Services – HVAC, waste management, utilities contracting
• Logistics & Transportation – Third-party logistics providers, specialty trucking
• Financial Services / Fintech Niches – Insurance distribution, specialty finance

CapitalPad is more cautious on capex-heavy, cyclical, or highly commoditized industries such as oil & gas, heavy manufacturing, or discretionary retail.

There are no fees or costs for sponsors to use CapitalPad.

CapitalPad’s compensation comes through a 20% carried interest paid by investors, earned only after investors have a return of their initial invested capital.

CapitalPad also charges investors a one-time (not annual) management fee of 1.5% in order to help offset deal expenses.

CapitalPad is a direct equity capital provider to independent sponsor deals, but also has a network composed of high net worth accredited investors, family offices, private funds, and SBICs with established track records in sponsor-led acquisitions.

Once approved, CapitalPad circulates a blinded teaser to our curated investor network through a secure platform. Only investors who execute an NDA and non-circumvention agreement gain access to the full deal materials and diligence room. All others remain restricted to the teaser summary.

Yes. All opportunities begin with a blinded teaser. Full deal materials are only accessible to investors who have executed an NDA and non-circumvention agreement within the secure CapitalPad platform.

Without those agreements, investors remain limited to the teaser.

Sponsors should be prepared to provide a complete post-LOI package, including:

• Executed LOI
• Deal memorandum / investor deck
• Company overview and investment merits
• Historical financials (P&L, tax returns, statements)
• Financial model with base, upside, and downside cases
• Sources & uses of funds
• Investor terms (preferred return, IRR, step-up structure)
• Acquisition terms and purchase agreement outline
• Status of debt financing (lender discussions or term sheets)
• Post-close growth and value-creation plan

CapitalPad typically evaluates submissions within 2–3 business days. Sponsors receive timely feedback, including either approval to proceed or specific guidance on next steps.

Timelines depend on deal size, structure, and investor demand. In general, the more lead time provided, the greater the potential allocation. Some transactions have been funded in as little as 14 days, but larger raises almost always require additional time.

Sponsors are encouraged to share specifics early so we can provide tailored feedback on timing.

CapitalPad invests between $750,000 to $2,000,000 in independent sponsor deals.

However, larger transactions may be completed by combining CapitalPad’s direct commitments along with allocations from our network of institutional partners.

To participate, institutional investors must typically commit $750,000 or more each, ensuring sufficient scale to meet sponsor requirements.

No. CapitalPad focuses exclusively on equity investments.

However, we maintain relationships with various lenders and SBIC funds.

Contact us if you’d like an introduction.

Investors expect market-standard economics that align sponsor incentives with customary protections for minority equity holders.

A typical structure for independent sponsor transactions includes:

• Closing Fee: 1–2%, often rolled into the equity raise
• Management Fee: Up to 5% of trailing twelve-month EBITDA, generally with a floor and cap
• Carried Interest: A scaling promote structure tied to MOIC hurdles
• Preferred Return: 6–12%
• Target Returns: CapitalPad generally expects to see a modeled IRR of 30%+ under moderate growth assumptions

Independent sponsor deal terms should be consistent with benchmarks outlined in the McGuireWoods Independent Sponsor Study and other market surveys.

All CapitalPad investor allocations are consolidated into a single special purpose vehicle (SPV).

The SPV invests directly into your transaction, so sponsors only manage subscription agreements and wire requests with CapitalPad as the SPV manager. This eliminates the complexity of coordinating dozens of individual investors.

For larger institutional commitments ($750K+), investors typically invest directly rather than through the SPV.

Yes, CapitalPad can help with deal sourcing for qualified sponsors. Learn more during platform onboarding.

Beyond providing capital, CapitalPad remains engaged after closing to help sponsors drive growth and professionalize operations.

Our support can include vetting service providers, redesigning websites, scaling marketing initiatives, and offering strategic or operational guidance. When needed, we are willing to roll up our sleeves and work alongside sponsors to create long-term value.