How To Raise Money For A Company

Updated Q3 2026 by CT Acquisitions.

If you run a $3M to $50M revenue business generating $1M to $25M of EBITDA and you want to understand how to raise money for a company without giving up the wheel, this guide is written for you. It is not the Silicon Valley playbook. It is the lower-middle-market (LMM) operator playbook, grounded in 2024-2026 deal comps, named sponsors, and the specific dilution, cost, and timeline math a CFO or founder-owner actually faces when the phone starts ringing with growth-equity term sheets, family-office minority checks, mezzanine proposals, and unitranche packages.

We wrote this because the top-ranking generic guides on the topic assume the reader is a pre-seed startup founder with access to Sand Hill Road. Most LMM owners are not that person. They are running a specialty distributor in Ohio, an HVAC roll-up in Texas, a med-spa platform in Florida, or an MSP in the Carolinas. They need a plan that respects operating cash flow, existing lender relationships, and the founder’s post-close role. That is what follows.

What does it mean to raise money for a company at the lower-middle-market level?

Raising money for a company at the lower-middle-market level means selling securities (equity, debt, or hybrid preferred structures) to institutional or accredited investors in exchange for primary growth capital or secondary founder liquidity. For a business with $1M to $25M of EBITDA, this usually takes the form of a Regulation D 506(b) or 506(c) private placement led by a growth-equity fund, a family office, or a private-credit lender, and it is very different from a Series A venture round.

The lower middle market is defined by PitchBook and Axial as businesses with roughly $10M to $500M of enterprise value, or $1M to $25M of EBITDA depending on the sector. Capital raises inside this band are structurally different from either startup venture rounds or upper-middle-market sponsor deals. The typical LMM raise involves a single lead investor rather than a syndicate, a single closing rather than tranches, and diligence anchored in audited or reviewed financials rather than product-market fit narratives.

The instruments available to an LMM operator generally sort into three families. First, equity capital, which can be minority growth equity, majority recapitalization, or a full sale with rollover. Second, debt capital, ranging from senior asset-based lending through unitranche and second-lien to mezzanine subordinated notes. Third, hybrid capital, most commonly preferred equity, structured equity, or convertible notes with an equity kicker. Our internal guide on the private equity capital stack breaks this out in more detail.

Who typically raises money for a company in the lower middle market?

The typical LMM capital raiser is a founder-owner or operator-CEO of a business with $3M to $50M in revenue and $1M to $25M in EBITDA, often growing at 10% to 40% per year. Common triggers include funding an acquisition roll-up, buying out a legacy partner, taking chips off the table before a full exit, funding a geographic expansion, or replacing expensive expansion debt with equity. Recent 2024 to 2026 examples include Alpine Investors backing service platforms and Trivest Partners funding founder-led minority recaps.

Three archetypes dominate our conversations. The growth-first founder is running a business that has doubled or tripled in three years and needs equity to fund working capital, sales infrastructure, and small tuck-in acquisitions. The partial-liquidity founder has built a strong cash flow business, wants to derisk personally by selling 30% to 60%, and stay involved for another four to seven years. The succession-planning founder is preparing for a full exit within 18 to 36 months and uses a minority recap or preferred structure to test the market and lock in an anchor sponsor.

What these owners share is that they are not the audience VCs write for. They are cash-flow positive, they have real customers on multi-year contracts, and their capital raise is a chapter in a longer operating story, not a launch event. If that describes you, our lower-middle-market M&A advisor guide covers the sell-side equivalent of this conversation, and our growth equity vs private equity deep-dive helps sort which investor type fits.

How does raising money for a company compare to alternatives like debt or a full sale?

Raising equity generally costs more in the long run than raising debt but preserves cash flow and shifts risk to the investor. Raising debt is cheaper if you can service it, but requires collateral, covenants, and personal guarantees below a certain size. A full sale monetizes 100% of the enterprise value today but ends the operator’s economic upside. Most LMM operators in 2026 blend all three: senior debt in the capital stack, a minority or majority equity partner, and a strategic exit or IPO several years later.

The trade-offs matter. A $20M unitranche loan at SOFR plus 600 bps costs roughly $2.2M per year in cash interest at current rates, which is real money coming out of operating cash flow. That same $20M in minority equity from a growth investor costs nothing in cash today but permanently dilutes the founder by roughly 25% to 35% and adds a board seat, information rights, and eventually an exit obligation. A full sale monetizes the enterprise but ends the founder’s operating role and future upside on any post-close growth.

The right blend depends on three variables: interest coverage ratio, growth rate, and the operator’s personal risk tolerance. Our internal guides on debt vs equity financing, mezzanine debt for acquisitions, and unitranche debt acquisition financing lay out the math for each combination. We usually model at least three scenarios before recommending a path.

Capital source	Typical check size (LMM)	Ownership impact	Cash cost per year	Best fit
Senior bank debt / ABL	$2M to $75M	None	SOFR + 300 to 450 bps	Asset-heavy, predictable cash flow
Unitranche / private credit	$10M to $150M	None (occasional warrants)	SOFR + 550 to 700 bps	Sponsor-backed acquisitions and recaps
Mezzanine / sub debt	$5M to $50M	Warrants (1% to 5%)	10% to 14% blended	Filling gap between senior debt and equity
Preferred equity	$10M to $100M	2% to 15% common equivalent	7% to 12% PIK or cash	Growth funding with limited dilution
Minority growth equity	$15M to $75M	20% to 40%	None	Founder wants to stay CEO, needs growth fuel
Majority recapitalization	$25M to $200M	51% to 80%	None (may include acquisition debt)	Founder wants partial liquidity and continued involvement
Full sale	$10M to $500M+	100%	None	Exit or succession event

When does raising money for a company make sense?

Raising money makes sense when the return on invested capital from the new dollars clearly exceeds the blended cost of that capital, and when the company’s stage, sector, and financials fit what investors are actively funding. In 2026 that generally means a business with at least $1M of EBITDA, gross margins above 30%, revenue growth above 10%, and a defensible market position. Companies below these thresholds can still raise, but usually only from a family office or an SBA-backed structure.

The clearest signal to raise is a specific, near-term use of proceeds with a definable return. Examples include acquiring a competitor at 5.0x EBITDA when the pro forma platform trades at 8.5x (accretive tuck-in math), funding a new geography that has already been proven in the home market, or replacing 12% mezzanine with 6% senior debt after hitting scale. Vanity capital raises (fundraising because a peer did) tend to end badly.

The clearest signal not to raise is an unresolved business issue that capital will not fix. If the sales pipeline is broken, if key-person risk is unaddressed, or if the accounting is not close to GAAP, a raise usually makes those problems worse rather than better. In those situations the higher-return work is 90 to 180 days of preparation before opening any conversations, which is precisely how our M&A advisory team runs pre-launch readiness.

How much does it cost to raise money for a company, and what is the dilution math?

Total cash cost to raise LMM equity typically runs 3% to 7% of gross proceeds in transaction fees (advisor, legal, accounting, QoE), while dilution on a minority round runs 20% to 40%. For a $30M growth equity raise, expect roughly $1.2M to $2.1M in cash transaction costs and a 25% to 35% cap-table dilution. Debt raises are cheaper in fees (usually 1% to 3% of principal) but carry ongoing interest expense. GF Data’s 2026 reports consistently show these ranges across sponsor-backed LMM deals.

The fee stack has predictable components. A placement agent or investment bank typically charges a monthly retainer of $10K to $50K plus a success fee. Success fees follow either a modified Lehman scale (5% on the first million, 4% on the second, and so on) or a flat percentage. On a $30M raise, a common outcome is a total advisor fee of $600K to $1.5M. Legal fees for a well-run equity raise typically fall between $250K and $600K on the company side, with buyer counsel on top. A sell-side Quality of Earnings report runs $40K to $90K.

Raise size	Advisor retainer + success fee	Legal (company side)	QoE + accounting	Timeline (weeks)	Typical dilution
$5M to $10M	$150K to $400K	$150K to $300K	$30K to $60K	16 to 24	20% to 35%
$10M to $25M	$300K to $900K	$200K to $450K	$40K to $75K	18 to 28	20% to 35%
$25M to $75M	$700K to $2.5M	$300K to $600K	$50K to $90K	20 to 30	25% to 45%
$75M to $200M	$1.5M to $6M	$500K to $1.2M	$75K to $150K	22 to 34	30% to 70% (recap)

Sources for the ranges above include the GF Data 2026 Middle Market Report, Axial 2025 Winners Circle, and PitchBook’s 2026 US PE Breakdown. Actual costs vary by sector, complexity, and how far along the seller is on their term sheet literacy.

Who provides capital to lower-middle-market companies?

LMM capital comes from four buckets: growth equity funds (Susquehanna Growth Equity, Frontier Growth, Bregal Sagemount), traditional lower-middle-market private equity (Trivest Partners, Peak Rock Capital, Trive Capital, Sole Source Capital), family offices with direct-investment arms (Pritzker Private Capital, Cranemere, JAB Holding), and structured-capital and mezzanine specialists (Golub Capital, Twin Brook Capital, Monroe Capital). Each has a distinct check size, hold period, control preference, and vertical focus.

Choosing among these firms is not primarily about check size. It is about fit across five dimensions: sector expertise, check-size sweet spot, control preference, hold period, and cultural style. A family office like Pritzker Private Capital famously holds businesses for 10 to 20 years and typically stays minority or majority-lite. A traditional PE fund like Trivest Partners runs a five to seven year hold with a clear exit obligation. Growth equity firms often take minority positions with strong governance rights but no operational takeover.

Sponsor	Firm type	Typical check	Position	Focus sectors
Bregal Sagemount	Growth equity	$25M to $250M	Minority or majority	Software, tech-enabled services, healthcare IT
Trivest Partners	LMM private equity	$25M to $150M	Majority (with rollover)	Founder-led services, consumer, industrial
Peak Rock Capital	LMM private equity	$25M to $200M	Majority	Consumer, industrial, food and beverage
Frontier Growth	Growth equity	$15M to $50M	Minority	B2B SaaS, tech-enabled services
Susquehanna Growth Equity	Growth equity	$25M to $175M	Minority	Software, fintech, information services
Pritzker Private Capital	Family office / direct	$50M to $500M+	Majority (long hold)	Middle-market manufacturing, services
Golub Capital	Private credit / unitranche	$10M to $300M	Debt (occasional equity)	Sponsor-backed LMM to upper MM
Twin Brook Capital	Private credit / unitranche	$25M to $200M	Debt	Sponsor-backed LMM

This is a partial list. Our internal sponsor database tracks over 900 LMM-active investors across growth equity, buyout, family office, and private credit, with detailed check-size, sector, and geographic filters. That database is what powers the shortlist stage of any process we run for a client.

The 2024 to 2026 vintage of sponsor activity also shows a growing role for independent sponsors and fundless investors, who raise capital deal-by-deal rather than from a committed fund. Firms like Trinity Hunt Partners’ associated independents, Kian Capital, and Broadtree Partners have completed multiple LMM platform investments in the last two years. Independent sponsors typically move slower than fund sponsors on speed to close (an extra four to six weeks to raise the equity check) but often offer stronger operator alignment and a more flexible governance package. Whether an independent sponsor is the right fit depends heavily on the owner’s tolerance for closing risk.

Non-US sponsors are also increasingly active in the US LMM. European mid-market houses like IK Partners and Nordic Capital have opened US offices in the last three years. Canadian pension-backed platforms including OMERS Private Equity and CPP Investments have deployed capital into US LMM add-on strategies through their portfolio companies. For LMM operators in high-demand verticals like specialty distribution or vertical software, the sponsor universe realistically extends beyond the US border.

How does the process of raising money for a company actually work, step by step?

A competitive LMM capital raise runs on a 16 to 30 week timeline broken into six phases: preparation (weeks 1 to 8), teaser and CIM launch (weeks 8 to 10), sponsor outreach and management meetings (weeks 10 to 16), LOI negotiation (weeks 16 to 20), confirmatory diligence (weeks 20 to 26), and closing (weeks 26 to 30). At each phase the advisor’s job is to preserve competitive tension while giving sponsors enough information to move forward.

1. Readiness and advisor selection (weeks 1 to 4). Interview two or three advisors, sign an engagement letter with the right fit, and align on process type (broad auction, limited process, or targeted approach). Complete a sell-side Quality of Earnings so surprises surface before buyers, not during confirmatory diligence.
2. Materials build (weeks 4 to 8). Draft the Confidential Information Memorandum (CIM), the management presentation, the financial model, and the data room index. A high-quality CIM is 45 to 80 pages and includes clear revenue-driver analytics, cohort economics if applicable, and a clean historical financial narrative.
3. Sponsor targeting and teaser distribution (weeks 8 to 10). Circulate a one-page teaser under NDA to a curated list of 25 to 80 sponsors. Track engagement and follow up systematically. Most processes see a 50% to 70% teaser-to-NDA conversion rate on quality lists.
4. First-round bids and management meetings (weeks 10 to 16). Sponsors submit Indications of Interest (IOIs) with valuation range and structure. The advisor shortlists 8 to 15 sponsors for management meetings. This is the phase where fit matters most.
5. Letters of Intent and negotiation (weeks 16 to 20). Second-round bids arrive as LOIs, with committed dollars, structure, governance, and management-terms detail. The advisor negotiates against the field to pull terms toward the seller, then selects a lead sponsor for exclusivity.
6. Confirmatory diligence (weeks 20 to 26). Buyer runs financial, tax, legal, HR, IT, environmental, and commercial diligence. This is where sell-side QoE and clean documentation pay off. Any surprise here erodes valuation.
7. Definitive documents and close (weeks 26 to 30). Legal counsel drafts the Securities Purchase Agreement, the shareholders agreement, the employment agreements, and ancillary documents. Funding follows signing by one to two weeks in most transactions.

Our buy-side M&A advisory and selling to a growth equity investor guides walk through the mirror-image process for owners on the other side of the table.

What paperwork and documentation does a capital raise require?

A well-prepared LMM capital raise requires roughly 200 to 400 files in the data room across financial, legal, tax, HR, commercial, and operational categories. Core documents include three years of audited or reviewed financials, YTD monthlies, a rolling 13-week cash flow, a full contract inventory with change-of-control clauses flagged, the cap table with all option grants, an employee census, and a full corporate history including prior financings. Missing or messy documentation is the single most common cause of valuation erosion.

Financial documents anchor the diligence process. Buyers expect three years of audited or reviewed statements per US GAAP, monthly financials for the trailing 24 months, an EBITDA bridge from GAAP net income to Adjusted EBITDA with clear addback rationale, and a supportable forward projection. The sell-side QoE (produced by firms like EY, Alvarez and Marsal, or a specialist boutique) tests these numbers before buyers do.

Legal and corporate documents include the cap table, all prior stock and option issuances, articles and bylaws, all shareholder agreements, board minutes for the trailing three years, and a complete contract inventory. Commercial documents include customer concentration analysis, cohort retention if applicable, sales pipeline, and pricing history. HR documents include an employee census, benefits summaries, and any independent contractor classifications that could create tax liability. Any raise governed by SEC Regulation D 506(b) or 506(c) also requires a Form D filing within 15 days of first sale.

What are the tax and legal implications of raising money for a company?

Structure drives tax outcome. A primary equity issuance is generally tax-free to the company and the founder at issuance, while a secondary sale of founder shares triggers capital gains tax at the state and federal level (currently up to 20% federal plus state and 3.8% NIIT). Structures qualifying under IRC Section 1202 Qualified Small Business Stock (QSBS) can exclude up to $10M or 10x basis in gain from federal tax, which frequently drives significant value in LMM founder liquidity events.

Legal considerations start with securities law. Most LMM raises rely on SEC Regulation D 506(b) (no general solicitation, accredited investors plus limited unaccredited) or 506(c) (general solicitation permitted, all investors must be verified accredited). Both file a Form D but avoid full registration. State blue-sky notice filings apply in each state where an investor resides.

Governance changes typically kick in at close. Expect one or two investor board seats on a five to seven person board, protective provisions on major decisions (budgets, incentive plans, incremental debt, sale of the company), tag-along and drag-along rights, and a preemptive rights framework. Employment agreements for the founder and key executives usually include non-competes (subject to enforceability by state, with California, Minnesota, and increasingly others limiting them), non-solicits, and severance triggers. Our family office vs PE buyer guide covers how governance intensity differs across sponsor types.

What are the most common structures and terms in an LMM capital raise?

Common LMM equity structures include common equity, participating preferred, non-participating preferred with a hurdle, and structured preferred with a coupon. In 2026 the most common growth equity term sheet uses non-participating preferred at 1.0x liquidation preference with anti-dilution protection and standard governance. Structured preferred with a 7% to 10% PIK dividend is increasingly common for founder-friendly minority raises where the sponsor wants a floor return without a control position.

The five terms with the largest economic impact are: liquidation preference, participation, dividends, anti-dilution protection, and control triggers. A 1.0x non-participating preferred is founder-friendly. A 1.5x or 2.0x participating preferred with an uncapped participation right can meaningfully reduce founder proceeds in a downside scenario. Full-ratchet anti-dilution is aggressive; broad-based weighted-average is standard and neutral.

On the debt side, common structures include senior term loans and revolvers, unitranche facilities that combine senior and second-lien into one instrument, and mezzanine subordinated notes with warrants. In 2026, unitranche pricing typically sits at SOFR plus 550 to 700 basis points with a 50 to 100 bps floor. Mezzanine debt runs at a 10% to 14% blended yield (cash coupon plus PIK plus warrant equity kicker), per Refinitiv LPC. Our full breakdown lives in our mezzanine debt for acquisitions guide and our leveraged buyout acquisition financing guide.

In our experience advising LMM operators on how to raise money for a company, the term-sheet negotiation almost always turns on three points: the liquidation preference stack, the option pool refresh, and the definition of the trailing EBITDA number that anchors valuation. A founder who arrives at first-round bids without a modeled view on each of these ends up trading real economics for terms that felt like standard-market language at 2 a.m. The single highest ROI activity in any raise process is spending eight to twelve hours with your advisor before the first bid deadline stress-testing what each headline valuation actually delivers in your pocket at close, at year three, and at exit under three growth scenarios.

What are the red flags to avoid when raising money for a company?

The five most common red flags in an LMM raise are: retainers over 3% of estimated raise size, exclusivity periods over four months before an LOI, sponsors with no closed deals in the last 18 months in your sector, term sheets missing committed dollar amounts (only ranges), and success fees that scale with dilution rather than dollars. Any of these should trigger a hard conversation with your advisor about whether the counterparty is the right fit.

On the advisor side, be cautious of any capital raise firm that charges an oversized upfront retainer without a defined refund mechanism, quotes a success-fee percentage that lies above the modified Lehman scale for the given check size, or promises to shop the deal to a “proprietary list” without disclosing sponsor names under NDA. Legitimate FINRA-registered broker-dealers publish their track record, name recent transactions, and reference-check freely.

On the investor side, watch for indications of interest that omit committed dollars, arrive without a signed NDA, or come from a sponsor whose fund is at the end of its investment period and has no fresh capital to deploy. Also watch for sponsors that require a 90 to 120 day exclusivity before signing an LOI. Exclusivity should come after competitive tension has priced the deal, not before. Our term sheet guide lays out what a real LOI should contain.

What are the 2024 to 2026 market dynamics for capital raises?

The 2024 to 2026 LMM capital-raise market is characterized by three forces: roughly $1.1 trillion of US PE dry powder needing to be deployed (per PitchBook Q1 2026 US PE Breakdown), interest rates normalizing from the 2023 peak but still higher than the 2019 to 2021 baseline, and record family-office direct investing (2024 UBS Global Family Office Report). The net effect is a highly competitive environment for quality LMM assets and a flight-to-quality dynamic where the top-quartile stories clear at 10x plus EBITDA while thin stories struggle.

Deal comps from the last 24 months paint the picture. In 2025, Alpine Investors continued executing its founder-led services roll-up strategy across HVAC, plumbing, and IT services. Trive Capital closed multiple LMM industrial-services platforms. Sole Source Capital was active in industrial distribution. Bregal Sagemount announced several software growth equity investments including recurring commitments in vertical SaaS platforms. On the credit side, Golub Capital and Twin Brook Capital continued to dominate LMM unitranche origination, according to Refinitiv LPC.

Multiples in the LMM have held up better than the upper middle market. GF Data’s Q1 2026 report showed the average TEV/EBITDA multiple across sponsor-backed LMM transactions in the $10M to $250M enterprise value range at approximately 7.4x, with top-quartile platforms clearing at 9.5x or above. Growth-equity minority rounds in software commonly price at 6.0x to 12.0x forward revenue. Family offices, per PwC’s 2025 Global Family Business Survey, are increasingly willing to pay parity with institutional buyers to win minority positions in high-quality businesses they can hold long term.

Sector-specific dynamics matter. Vertical software and healthcare services remain the two hottest LMM categories in 2026 (per McKinsey’s 2025 Global Private Markets Report), with average multiples in these categories running 1.5x to 3.0x above the LMM average. Industrial services and specialty distribution follow closely, driven by roll-up thesis appeal. Consumer businesses and cyclical industrials have compressed as sponsors weight in inflation and rate-sensitivity risk. Founder-owned businesses with double-digit organic growth and gross margins above 40% continue to see the most competitive processes.

Rate environment matters for capital structure. The Federal Reserve lowered the federal funds rate multiple times through late 2024 and 2025, bringing the effective SOFR floor to a level that supports higher leverage multiples on unitranche and second-lien deals. Debt-to-EBITDA on sponsor-backed LMM deals has climbed back toward 4.5x to 5.5x total leverage in 2026, from the 3.8x to 4.5x trough of 2023. That directly increases the equity check a sponsor can write for a given enterprise value, which is why LMM raise activity has rebounded so quickly.

The IPO market and the strategic-buyer bid also shape LMM equity pricing. Strategic acquirers (public companies buying LMM assets for synergy) typically pay a 20% to 40% premium over sponsor multiples according to Bain and Company’s 2025 Global Private Equity Report. When strategic buyers are active in an LMM operator’s sector, sponsor bids get pulled higher to compete. Owners running a raise or exit process in 2026 should always run a targeted strategic-buyer tranche in parallel to the sponsor tranche.

How do you choose among competing advisors for a capital raise?

Choose the advisor with the closest sector expertise, the most defensible reference calls, and the process rigor to run a competitive auction. Fee structure matters less than advisor quality. Interview two or three firms, ask each for three references of comparable-size closed deals in your sector in the last 24 months, and stress-test their sponsor list. Firms that name specific sponsors under NDA and can walk through prior interactions are legitimate. Firms that speak only in generalities are usually not.

The most useful diligence questions are simple and specific. How many LMM raises of comparable size and sector have you closed in the last 36 months? Who was the lead partner on each? What was the process type (auction, limited process, targeted)? What percentage of your engagements close within 30 days of the original target? What sponsors would you approach for our deal, and why those specifically? What went wrong on your last three deals, and how did you fix it?

Our team publishes annual capital raise activity on the CT M&A advisory page. Owners considering our services can request a full sector-specific reference list and a shortlist of sponsors we would target for their specific business as part of a no-cost initial consultation. That conversation is where most owners get their first honest view of what their business is worth and who would pay it.

How does CT Acquisitions help you find the right equity partner?

CT Acquisitions runs a five-step process to match LMM operators with the right equity partner: business profiling and readiness, sponsor universe filtering against our 900+ firm database, a two-round competitive process, LOI negotiation with modeled economics for the founder, and confirmatory diligence support through close. Our engagement model combines a modest retainer with a Lehman-scale success fee, which aligns incentives and preserves optionality for the client.

The core value we deliver is fit and tension. Fit means the sponsor’s check size, sector track record, hold period, and cultural style match the operator’s situation. Tension means multiple credible bids that pull terms toward the seller. Neither happens by accident. Both come from a well-prepared, competitively run process managed by an advisor who has been on both sides of hundreds of LMM deals.

We work across sell-side, buy-side, and capital raise mandates. Our related pages cover the capital raise overview, raise growth capital, raising capital, and business acquisition loan use cases. For owners weighing a full sale as an alternative to a raise, our M&A advisory practice handles that end-to-end.

Frequently asked questions

How much money can an LMM company realistically raise in one round?

A lower-middle-market business with $2M to $10M of EBITDA can typically raise between $10M and $150M in a single round, depending on structure. Minority growth equity checks from firms like Susquehanna Growth Equity or Frontier Growth commonly sit between $15M and $75M. Family-office minority recaps often land in the $10M to $50M range. Unitranche and second-lien packages can push total proceeds to $150M or more when senior leverage stacks with a mezzanine or preferred equity slice.

What is the average dilution for a growth equity round in the lower middle market?

Minority growth equity rounds in the LMM typically price between 20% and 40% dilution for a primary investment, according to GF Data’s 2025 Middle Market Report. Recapitalizations that combine primary capital with secondary founder liquidity often move the sponsor to a 51% to 70% position. The exact split depends on trailing twelve-month EBITDA multiple, growth rate, and how much of the check is primary versus secondary.

How long does it take to raise money for an operating company?

Plan on four to seven months from advisor engagement to funded close for a competitive LMM equity process. Preparation and CIM drafting takes six to ten weeks. Sponsor outreach and management meetings run six to eight weeks. LOI negotiation, confirmatory diligence, and closing legal work adds another eight to twelve weeks. Rush processes can compress to three months but usually give up negotiating power at the LOI stage.

Do I need an investment bank or can I raise money myself?

You can technically self-run a raise, but data from Axial’s 2025 Winners Circle report suggests that advised LMM equity processes clear at a 0.7x to 1.4x higher EBITDA multiple than unadvised ones after controlling for sector and growth. A sell-side advisor or placement agent typically pays for itself through competitive tension, deal structuring, and diligence support. Self-running works best when you already have a preferred sponsor and are optimizing for speed rather than valuation.

What is the difference between a placement agent and a broker for LMM capital raises?

A placement agent is a FINRA-registered broker-dealer whose job is to run a competitive process, manage sponsor relationships, and negotiate the equity or debt package. A generalist business broker typically works smaller Main Street deals under $5M enterprise value with a listing-service model. For anything above $10M in enterprise value or requiring institutional capital, a boutique investment bank or placement agent is the right instrument.

Will a growth equity investor let me stay CEO after they invest?

In minority growth equity investments, the founder or operator almost always stays CEO for the life of the hold, typically four to seven years. In majority recapitalizations, sponsors like Bregal Sagemount, Peak Rock Capital, or Trive Capital frequently retain the operator through an earnout or a rollover equity stake of 20% to 40%. The specific answer lives in the shareholders agreement and the employment agreement, which our team negotiates against comparable market terms.

Is now a good time to raise money for a company in 2026?

PitchBook estimated dry powder in US private equity at roughly $1.1 trillion entering 2026, with growth equity strategies holding an outsized share. Rates have started to normalize after the 2023 to 2024 spike, and LMM deal volume rebounded in the first half of 2026 according to Axial. High-quality LMM companies with double-digit growth and clean numbers are getting multiple term sheets on any given process. Weaker stories still clear, but at lower multiples and longer timelines.

How does CT Acquisitions decide which equity partner is right for my company?

We start with your revenue profile, EBITDA quality, growth thesis, and post-close role preference. Then we filter our sponsor universe (family offices, growth equity funds, PE platforms, and structured-capital investors) for firms with a track record in your vertical, check-size fit, and cultural match with the operating team. We typically shortlist eight to fifteen sponsors and manage the competitive process from teaser to close.

Related reading from CT Acquisitions

• Raise capital: LMM operator hub
• M&A advisory (sell-side)
• Buy-side M&A advisory
• Lower-middle-market M&A advisor
• Growth equity vs private equity
• Mezzanine debt for acquisitions
• Unitranche debt acquisition financing
• Selling to a growth equity investor
• Family office vs PE buyer
• What is a term sheet
• Business acquisition loan
• Leveraged buyout acquisition financing
• Capital raise
• Raise growth capital