The capital stack on a $25–75M deal.

Three turns of senior. One and a quarter turns of mezz. Twenty-percent equity rollover from the seller. The rest in LP equity and a small sponsor commit. That is the capital stack on most $25M to $75M independent sponsor deals I structured this year.

The senior is the cheapest money in the stack. SOFR plus 500 to 625 basis points, depending on industry and lender appetite. At three turns of EBITDA, on a $7M EBITDA platform, that is $21M of senior. The interest expense at SOFR plus 575 is roughly $2.3M per year at current rates.

This is the layer where most platform deals get over-leveraged. The temptation to go to 3.5 turns instead of 3.0 is real because the sponsor's equity check shrinks. The cost is operating flexibility. At 3.0 turns the platform can absorb a soft quarter. At 3.5 turns the platform is one bad quarter from a covenant default.

The mezz at one and a quarter turns. On the same $7M EBITDA platform, that is $8.75M of mezzanine. Mezz pricing varies more than senior, but call it 10 to 12 percent cash pay with a 2 to 4 percent PIK toggle and warrants for 1 to 3 percent of equity. The warrants are the deal, not the coupon. Negotiate the warrants like equity. Negotiate the coupon like debt.

The seller rollover at twenty percent. On a $50M EV deal, that is $10M of seller equity that stays in the post-close entity. This is the cheapest alignment tool on the table. Structure the rollover at the post-close entity level, with tax-deferred treatment under Section 351 or 721 where possible.

The LP equity at the remainder. The sponsor commit is usually 1 to 3 percent of the LP equity. Small but visible. LPs read it.

Build the stack on a single page. Use a horizontal table with five columns: layer, amount, multiple of EBITDA, cost (annual), and structure note. Use the same EBITDA number everywhere. Reconcile sources and uses to the penny. Include the working capital adjustment as a source, not a footnote.

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