Capital raise · Home Services

Home Services Co-Investment Rights: An Independent Sponsor's Counsel

Securities and M&A counsel for independent sponsors negotiating home services transactions, from LOI to close to the capital markets that open up afterward.

EV range $8M to $80M EV EBITDA $2M to $15M Audience Independent Sponsor
The deal context

The economics on a home services platform deal usually hinge on a handful of structural decisions. Co-Investment Rights is one of them.

The typical home services platform sits at $8M to $80M EV with EBITDA in the $2M to $15M range. The thesis runs on regional roll-ups of HVAC, plumbing, and electrical operators. The cleanest home services deals close in 60 days from LOI. The mess is almost always in the licenses, not the financials.

The moves

How Co-Investment Rights actually gets structured.

  1. Define co-invest rights pro-rata to the LP's deal commitment.

  2. Build a 30-day decision window so the deal does not stall.

  3. Limit co-invest fees and carry, if any, to reflect the relationship value.

  4. Document the right in the LPA, not in a side letter.

  5. In home services, layer in working capital peg that survives a slow February as part of the Co-Investment Rights workstream.

The common mistake

Granting unlimited co-invest. The next LP finds out and your firm economics suffer.

Jason's take
"Co-investment is a privilege you give to the LPs you want to keep. Define it accordingly."
Jason Powell · Co-Investment Rights
Capital after close

The deal is one thing. The capital that opens up after close is another.

Most independent sponsors solve the closing capital and then run into the post-close capital problem alone. The capital markets relationships that matter at month 18 are part of this practice.

MONTH 18
Senior refi
MONTH 24
Dividend recap
MONTH 36
Growth equity
YEAR 4–5
Strategic exit
TALK TO JASON

An LOI on the desk, a home services target, and a Co-Investment Rights 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.