Independent Sponsor Lawyers

Deal counsel for independent sponsors buying e-commerce, SaaS, and consumer brands, from the LOI through closing

You found the business, negotiated the price, and signed the LOI. Now the exclusivity clock is running, the seller wants to know where the money is coming from, and your capital partner has not yet agreed to your economics.

That is the independent sponsor’s position in every deal. You carry the deal costs before anyone else has committed a dollar, and your fee, your promote, and your seat at the table are negotiated from scratch each time.

Revision Legal represents buyers, sellers, and investors in the purchase and sale of online businesses. We put that experience to work for sponsors who buy companies one deal at a time.

Let’s Discuss Your Deal or call 855-473-8474

The LOI & Exclusivity

A sponsor’s LOI has two jobs. It has to give the seller enough confidence to stop shopping the business, and it has to give you enough time and enough room to raise the capital. We draft and negotiate exclusivity periods, financing conditions, and expense provisions with both jobs in mind.

Confidentiality & Non-Circumvention

The moment you show a deal to a capital source, you are exposed. We put confidentiality and non-circumvention agreements in place before the deal book goes out, so that you have a contractual remedy if an investor tries to go around you.

Sponsor Economics

Closing fee, management fee, promote, and the equity you roll or buy at closing. We negotiate each with your capital partner and make sure the term sheet you agreed to is the one that shows up in the operating agreement. A twenty percent promote is only worth what the waterfall, the hurdle definitions, and the forfeiture provisions say it is worth.

Governance & the Operating Agreement

Your capital partner will usually hold most of the equity. Board seats, approval rights, removal for cause, what happens to your promote if you are removed, and your rights on a sale decide whether you are protected. We negotiate those terms before closing, when you still have leverage.

Deal Structure & Financing

We form the acquisition entities and work through the capital stack with you: equity commitments, senior and mezzanine debt, seller notes, rollover equity, and earnouts. We have negotiated credit facilities, helped buyers with SBA 7(a) financing, and handled escrowed earnout payments on behalf of clients.

Securities & Regulatory Questions

Raising equity for a deal is selling securities. We handle Regulation D offerings and the investor documents that go with them. We also advise on whether a transaction-based closing fee requires broker-dealer registration, and whether ongoing fees and carry make you an investment adviser. Both are cheaper to solve before the term sheet is signed.

Diligence & the Purchase Agreement

We review and draft asset and share purchase agreements, intellectual property assignments, and the other transaction documents, and we negotiate the indemnification caps, baskets, and escrows that decide who bears a problem found after closing.

When a Deal Goes Sideways

We do not just help buy and sell businesses. We also litigate on behalf of our clients when deals fall apart or one party does not adhere to the terms of the agreement.

Case Study
SaaS Acquisitions

A venture-backed entity focused on acquiring SaaS businesses has turned to Revision Legal to guide all acquisitions. Knowing that time kills deals, Revision Legal attorneys have diligently and quickly worked to close on several seven to eight-figure acquisitions, with agreements specifically drafted on the relevant risks and opportunities for SaaS businesses.

The diligence that online businesses require

If your target makes its money online, the largest risks are not in the minute book. They sit in the accounts, platforms, and data the business depends on. Our diligence covers the items a general M&A checklist leaves out.

Marketplace accounts

Amazon account health, policy violations, and whether the seller account can be transferred to a buyer at all.

Payment processing

Processor standing, reserves and holds, and whether the business or its owners appear on the MATCH list (the terminated merchant file).

Intellectual property

Who owns the trademarks, whether the chain of title is clean, and whether founders, contractors, and agencies ever assigned what they created.

Website & marketing compliance

Exposure under website accessibility, text message marketing, and privacy and tracking laws that can follow the business to its new owner.

Customer data

What the privacy policy promised customers, whether the customer list can lawfully transfer, and the security history behind it.

Platform & supplier dependence

Compliance with the terms of every platform the business sells or advertises on, and what a change of control does to its key contracts.

Our attorneys handle trademark, privacy, domain, and e-commerce matters for online businesses outside of any deal, so we know which diligence findings are housekeeping and which ones become lawsuits. For more, read our guide to e-commerce acquisitions.

Experience

Represented buyers and sellers in over half a billion dollars in e-commerce acquisitions

Formed e-commerce roll up funds focused on acquiring Amazon FBA businesses, SaaS businesses, and consumer product brands

Served as general counsel to one of the largest brokers of digital assets and advised on closing the sale of hundreds of online businesses

Negotiated an eight-figure international credit facility for a major e-commerce aggregator

Created an investment structure for a fund of funds holding e-commerce businesses

Assisted in all aspects of Regulation D offerings, from forming the entity, to drafting private placement memoranda, to closing rounds of investment

Helped buyers with acquisition financing, including SBA 7(a) loans, and handled escrowed earnout payments

Handled the acquisition of a company in exchange for stock and cash

Prior results do not predict a similar outcome. More on our deal work: Buying & Selling and Private Equity & Venture Capital.

Legal spend that fits the deal

A sponsor pays for a broken deal out of pocket. We tailor our services to the size of your deal. For smaller deals, we reduce the scope of our work so that legal spend is not disproportionate to the deal size. For larger deals, we provide more comprehensive services, such as extensive due diligence.

Buyers, sellers, and capital partners

We represent buyers, sellers, and investors, so we know what the other side of the table expects from a sponsor and where it has room to move.

Questions sponsors ask us

What is an independent sponsor?

An independent sponsor, sometimes called a fundless sponsor, finds and negotiates an acquisition first and raises the capital for that specific deal second. There is no committed fund behind the sponsor. The equity usually comes from family offices, private equity funds, and individual investors, and the sponsor is paid through fees and a share of the profits.

How do independent sponsors get paid?

Usually in three ways: a closing fee when the deal closes, an ongoing management fee from the acquired company, and a promote (a share of investor profits above agreed return hurdles). Each is negotiated deal by deal with the capital partner, and part of the closing fee is often rolled into equity.

When should I bring in deal counsel?

Before you sign the LOI and before you send the deal to a capital source. The LOI sets your exclusivity and your exposure on expenses, and the first conversation with an investor is where your economics start to be set. Both are hard to renegotiate later.

Do I need to register as a broker-dealer to take a closing fee?

It depends on how you are paid and what you do in the deal. Compensation that is contingent on the closing of a securities transaction is the classic trigger for broker-dealer registration. A federal exemption covers certain M&A brokers, but it comes with conditions. It is limited to privately held companies below set size thresholds, and it is not available when the broker facilitates a deal with a group of buyers the broker helped form, or a sale to passive buyers (15 U.S.C. § 78o(b)(13)). It also does not appear to preempt state registration requirements. The structure of the fee, who pays it, and your role in the company after closing all matter.

Can a capital partner take my deal and close without me?

It happens, and the protection is paperwork signed before you share the deal. A confidentiality and non-circumvention agreement gives you a contractual claim if an investor tries. Without one, you are relying on the investor’s reputation.

Do you also represent sellers and capital partners?

Yes. We represent buyers, sellers, and investors, so we know what the other side of the table expects from a sponsor and where it has room to move.

This page is general information and is not legal advice.

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