Independent sponsor

Definition

An acquirer who finds the deal first and raises the equity after.

Why It Matters

The deal-by-deal path trades a guaranteed salary for flexibility and for better economics on the deals you actually close, because investors are judging a specific business rather than a blind pool. The cost is that you fund your own search and carry the risk that a deal you have spent months and real diligence money on fails to raise its equity in time. It suits someone with the runway to work unpaid and a thesis credible enough that capital shows up when a live deal does.

In numbers: A sponsor might charge 2% at closing on a $10M deal, so $200,000, and take a share of profits that pays nothing at all unless the business performs.