Questions sponsors ask.

Every $10M+ independent sponsor acquisition has five distinct closings, not one.

Closing One is the LOI: sponsor and seller agree to price, structure, rollover, earnout, exclusivity. Two to four weeks.

Closing Two is the Capital Closing: the LPA signs, the LP wires. Four to eight weeks, parallel with debt.

Closing Three is the Debt Closing: senior credit agreement, mezz note, intercreditor. Four to eight weeks.

Closing Four is the Definitive Closing: the SPA, disclosure schedules, R&W policy, wire. This is the one most M&A people mean when they say "closing."

Closing Five is the 100-Day Closing: MIP grants, board, governance, senior covenant calendar. The platform begins.

Each has its own room, clock, leverage profile, and way to fail. The sponsor who wins is awake to all five. The framework is the spine of my practice and the book.

Below $10M in revenue, the framework is overbuilt. Sub-$10M deals are often SBA-driven, single-LP, no mezz layer, no R&W underwriting. The five closings don't all emerge as distinct events at that scale.

Above $10M revenue, the capital stack widens (senior + mezz + multiple LPs), R&W is standard, diligence economics justify a full QofE, and the LP base is institutional or near-institutional. That's where the framework becomes essential.

For sponsors operating in the $5M to $10M revenue band, the framework applies selectively. Use the LOI discipline. Use the QofE discipline. Skip the mezz analysis if there's no mezz.

Twenty to twenty-five percent above an eight percent preferred return, with a clean 50/50 catch-up. That's the band for lower-middle-market deals in 2026.

Five years ago, twenty percent was standard. The shift is not because LPs are getting more generous; it's because the sponsors who source and close real deal flow are harder to replace.

If you're negotiating and the LP starts at twenty, that's the conversation, not the conclusion. Push for 22 to 25 if you have a track record, a sourcing advantage, or a thesis the LP has explicitly bought.

Defend the number in the LPA, not in conversation.

Invested capital. Not enterprise value.

EV-based fees scale with every add-on, including ones funded mostly by debt. The LP feels they're paying twice for the same deal.

Invested-capital fees scale only when LP capital expands. The economics align with what the LP actually contributed.

Most deals settle around 2% to 2.5% of invested capital. Some step the fee down after year three. Define "invested capital" carefully in the LPA: include the sponsor commit, step up on LP co-invest, step down when LP capital is returned via recap.

With alternatives.

The sponsor with three soft-circled LPs holds the line. The sponsor with one negotiates from weakness.

The process to build alternatives starts in week one of the LOI. One-page deal summary to three to five LPs. Soft circle by week three. The competitive process produces the leverage; without it, the carry drifts.

If you're already in the LPA stage with one LP and they're pushing the carry down, you have three choices: take the haircut, walk and find another LP under time pressure, or find a way to give the LP something else they value more than the carry differential is worth to you. The third option often means a smaller-than-asked LP protective provision or a co-investment right. Negotiate the trade explicitly.

Sixty days, with a 30-day extension as a sponsor right.

Ninety days is too long. The seller's leverage rebuilds. The diligence team gets soft. Capital partners hear about the deal secondhand.

Forty-five days is too short. R&W carrier diligence alone takes that long. The lender bake-off needs space.

The extension as a sponsor right is the key. If the extension requires mutual agreement, the seller has new leverage in the last week of the 60-day window. If it's a sponsor right (triggered by 5-10 days written notice before expiration), the seller has no leverage.

If the seller has been on market for more than six months and the deal has stalled with two prior LOIs that did not close, use 75 days with no extension. The deal is fragile.

Day three of the LOI. Not week three.

The QofE is not a back-office workstream. It is the document that defines the price, the working capital peg, and the LP's commitment package.

If engaged on day three, preliminary findings are available by week three. You can have an early conversation with the seller while the seller's lawyer is not yet in defense mode. That conversation is a working one.

If engaged in week three (a common pattern when the sponsor is busy on multiple workstreams), preliminary findings land in week six, the financing commitment is due in week eight, and any QofE finding that suggests a price change feels like an ambush.

Day 1: LOI signs. Day 3: QofE engaged. Day 21: preliminary findings. Day 28: working conversation with seller. Day 35: final report. Day 42: working capital peg locked.

Three turns of senior. One and a quarter turns of mezz. Twenty-percent equity rollover. The rest in LP equity and a small (1-3%) sponsor commit.

The senior is the cheapest money. SOFR plus 500 to 625, depending on industry. At 3.0 turns on $7M EBITDA, that's $21M senior. Going to 3.5 turns shrinks the equity check but constrains operating flexibility.

The mezz is patient capital that wants warrants. Negotiate the warrants like equity. Negotiate the coupon like debt.

The rollover is the cheapest alignment tool on the table. Structure it tax-deferred under Section 351 or 721 where the entity structure allows.

If the stack does not fit on one page, the deal is over-engineered.

Month 18 in most cases.

By month 18, the platform has 18 months of operating data, the first add-on is integrated, and the original senior was priced for the entry, not the platform. The refi typically lowers the spread by 100 to 150 basis points, expands the leverage capacity, and loosens the covenants.

The bake-off takes 30 days. The new lender wants to see 12 months of reported EBITDA trending in the right direction. The proceeds free up the optionality for the next add-on or a dividend recap.

The call list for the refi is short. Build the relationships in months six through twelve, when the platform is not asking for anything. The lender who shows up at month 18 is the lender you've already met.

Three steps.

One. Bring the deal. The LOI on your desk, the CIM from the banker, or the napkin from coffee. Whatever you have.

Two. Twenty minutes. A call that gets specific in the first ten. The two or three structural decisions that drive the outcome. No retainer pressure.

Three. Structure that holds. Through LOI, LPA, credit agreement, SPA, and the 100-day plan. Then through the capital markets that open up after close.

Email jason@independentsponsorattorney.com to start the first step.

Above $10M in revenue and roughly $10M to $250M in enterprise value. That's the band where the framework is essential and where the diligence economics justify the work.

No industry focus in the sense of a vertical specialty. The practice has structured deals across 25 industries from healthcare services to specialty chemicals. Each sector has its own deal physics (payor mix, AS9100, MSO structure, dealer network), and the practice speaks each vocabulary natively.

Below $10M revenue, the framework is partial. The practice can still help, but components scale differently and some of the defensive tools (R&W underwriting, multi-lender bake-offs) aren't available at that altitude.

The framework still applies, but each closing has additional complexity.

The LOI must address jurisdictional questions, tax structure, and CFIUS exposure if foreign capital is in the LP base. The Capital Closing involves more cross-border tax planning. The Debt Closing may involve multiple lender pools. The Definitive Closing has more consents and more regulatory review.

For most cross-border lower-mid-market deals, the timeline extends 30 to 60 percent across all five closings. Plan accordingly. The practice can serve as US counsel and coordinate with foreign counsel in the relevant jurisdictions.

Every engagement is run through standard conflict-clearance procedures.

Repeat counterparties (a lender who has financed prior deals, a family office who has invested before) are not automatic conflicts. The practice keeps clear sides on every deal: representing the independent sponsor.

If a former client or counterparty is on the other side of a current deal, you'll be informed at the start of the engagement and a waiver process will be handled before any substantive work begins.

Confidential information from any prior matter stays confidential. Always.

The Five Closings: A Field Manual for Independent Sponsors Acquiring Companies Above $10 Million.

Fifteen chapters across four parts. Six appendices including a sample LOI term sheet, the capital stack calculator, the change-of-control consent matrix, and the 100-day plan template.

Part One frames the argument. Part Two walks through each of the five closings in detail. Part Three covers the long capital conversation that follows: refi at month 18, recap at month 24, growth equity at month 36, exit at year four to five. Part Four covers the sponsor's firm: roster, bench, documents.

Read the first chapter by emailing jason@independentsponsorattorney.com with subject "Five Closings sample."

The manuscript is complete. Publication details and a pre-order link will go live here when ready.

In the meantime, the framework is in active use across the practice. Every deal the practice runs is structured around the five closings. The book is the long form; the practice is the practice.

To get notified when the book is available, send a note to jason@independentsponsorattorney.com.