Seller Financing for Cybersecurity Services Independent Sponsors
Independent sponsor counsel for cybersecurity services, focused on Seller Financing and the deal mechanics that protect sponsor economics and LP alignment.
Every cybersecurity services acquisition has its own gravity. Seller Financing is the workstream where independent sponsor counsel earns the seat.
The typical cybersecurity services platform sits at $10M to $130M EV with EBITDA in the $2.5M to $22M range. The thesis runs on MSSP or specialty consulting platform. Cleared workforce is the moat. Cleared workforce can also be the deal-killer in CFIUS reviews.
How Seller Financing actually gets structured.
Anchor seller notes at 5 to 15 percent of EV, with a 4 to 6 year term.
Subordinate explicitly to senior and mezzanine debt with a clear standstill on default.
Price interest at 6 to 8 percent, with cash pay or PIK depending on the senior package.
Build prepayment optionality so refinancing flexibility is preserved.
In cybersecurity services, layer in FSO succession plan in place as part of the Seller Financing workstream.
Treating the seller note as a hand-shake. Sellers sue on notes more often than on equity disputes.
"A seller note is debt. Document it like debt. Service it like debt."Jason Powell · Seller Financing
The deal is one thing. The capital that opens up after close is another.
After close, the call list for refinancing, recapitalization, and growth equity gets short and known. Jason carries that list.
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An LOI on the desk, a cybersecurity services target, and a Seller Financing question worth a real conversation.
Twenty minutes of practitioner-grade input from a securities attorney whose first move is to read the deal, not the engagement letter.