Path Economics Comparer
The three ways to run a search trade the same things against each other: capital and control on one side, income and a backer on the other. This lays the trade out for a specific deal size. Stage 1 covers how to choose between them, and the Path Quiz points to the fit.
Self-Funded
The most ownership and the most risk, concentrated in you.
- Your capital
- About $150,000 (a 10% equity injection), or as little as $75,000 in cash if a seller note on full standby covers half
- Income while searching
- None while you search: you fund your own hunt
- Equity you end with
- Most or all of the company; any minority co-investors take a slice
- Personal guarantee
- Yes: you personally guarantee the SBA loan
- Control
- Full, from day one: you own it and run it
Traditional (Investor-Backed)
A backer and a salary in exchange for a minority of a larger company.
- Your capital
- None required: investors fund both the search and the acquisition
- Income while searching
- A modest stipend your investors fund while you search
- Equity you end with
- Typically around 20 to 30 percent, earned in thirds (on raising, on acquiring, on performance)
- Personal guarantee
- Usually none: the structure is institutional
- Control
- Shared with a board of your investors
Employed (Salary Model)
The most security and the least equity: a paycheck and a built-in backer.
- Your capital
- None: the firm funds the search
- Income while searching
- A salary from the firm while you search
- Equity you end with
- Up to roughly 20 to 25 percent, vesting over time
- Personal guarantee
- None
- Control
- Within the firm's structure and mandate
Equity figures are typical ranges that vary by deal and are negotiated; only the self-funded injection scales with the price shown.