Capital raise · Marketing Agencies

Independent Sponsor Management Fee Structuring in Marketing Agencies

Independent sponsor counsel for marketing agencies, focused on Management Fee Structuring and the deal mechanics that protect sponsor economics and LP alignment.

EV range $5M to $80M EV EBITDA $1.5M to $14M Audience Independent Sponsor
The deal context

The economics on a marketing agencies platform deal usually hinge on a handful of structural decisions. Management Fee Structuring is one of them.

The typical marketing agencies platform sits at $5M to $80M EV with EBITDA in the $1.5M to $14M range. The thesis runs on specialty agency or holdco platform with bolt-ons. If the founder leaves, half the agencies in the market lose 25% of revenue. Structure for that.

The moves

How Management Fee Structuring actually gets structured.

  1. Set the fee at 2 percent of invested capital, stepping to 1.5 percent after year three.

  2. Carve out portfolio-company services so add-on diligence is reimbursable.

  3. Allow accrual if cash flow does not support payment, with later cash catch-up.

  4. Make the fee subordinate to debt service, not to LP preferred return.

  5. In marketing agencies, layer in client roster scrubbed for top-five concentration as part of the Management Fee Structuring workstream.

The common mistake

Pricing the fee on enterprise value instead of invested capital. EV-based fees punish you on the first add-on.

Jason's take
"The management fee pays for the firm. Underprice it and you will run a hobby, not a platform."
Jason Powell · Management Fee Structuring
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
WORK WITH JASON

Bring the marketing agencies deal. Get Management Fee Structuring done right.

Direct counsel from a securities and M&A attorney with billions in structured transactions, the independent-sponsor-native playbook, and the capital markets network that opens up post-close.