LiveZilla Live Chat Software

Layer 3 – Equity

Equity is provided by independent funds and is provided on a multiple of EBITDA valuation basis. As the bottom of the layer structure, it is the riskiest and most expensive layer of capital. Equity is generally priced at 30%+ per annum. It receives no current payment in interest so all of its return is realized on the back end through capital appreciation of its shares. Standard equity valuation is 5 to 8 times EBITDA. Equity has the longest term of all of the layers in the 3 layer cake. There is no obligation on the part of the business to repay the principal unlike a loan. Due to the riskiness of this layer being at the bottom of the cake and having no contractual right to repayment, equity is very expensive capital and usually ends of with greater than 50% of the shares in the company. Because equity providers own a large piece of the business, they are perfectly aligned with the risk reward profile as the business owner. It is in their own interest to promote growth of the business and to facilitate corporate growth through providing follow-on capital if warranted.

What We Offer
  • Corporate Finance Expertise
  • Vast Practical Experience
  • Legendary Customer Service
Latest M&A Industry Updates!
  • Current trends in Lower Middle M&A Market and Middle-market Mezzanine!
Get a Free Consultation!
  • Mezzanine Funding Solutions
  • Advisory Services
  • End-to-end Acquisition Services
Get a Free Consultation

* Fields marked with an asterisk are mandatory


From Our Blog

Special Recent Posts

The Research is in: Here’s How to Have a Happier and More Productive Business Environment
Why Search Funds need a Debt Advisor

Why Search Funds need a Debt Advisor

October 10th, 2017

Search equity funds are a growing force ... read more

Overcapitalization to the Rescue

Overcapitalization to the Rescue

October 9th, 2017

Winning in business involves having enou... read more

© 2017 AttractCapital, LLC All Rights Reserved.