Searchers often get stuck after finding an attractive business. Maybe the bank requires a higher down-payment, or the seller suddenly insists on more cash at close. Either way, there’s often a gap between what the searcher has to invest and what’s needed to close the deal.
That shortfall is what’s known as an equity gap, and it’s one of the most common deal-killers for would-be SMB acquirers. While traditional investors typically pass on smaller deals, a growing number of players have emerged to provide that last piece of equity ($25k to $1M) to self-funded searchers.
It helps to know where to go in case you find yourself in a similar situation. In this guide, we’ll cover some of the most active equity gap investors in the SMB ETA ecosystem — groups that understand searchers, move fast, and know how to structure deals that pencil for both sides.
Where to Find Investors for a SMB Acquisition
Of course, not all ETA investors are created equal. approaching friends and family has its own drawbacks. Many don’t write checks for a minority stake, and those that do typically demand better terms and governance to de-risk. The best understand tight timelines, imperfect diligence, and nuanced deal structures that so often come with self-funded search.
Here’s what to look for when choosing who to partner with:
- Speed and Responsiveness – Deals can die fast. You want investors who can review materials and issue soft commitments within days, not weeks.
- Flexibility on Structure – The ideal partner isn’t rigid about equity splits or board seats. They focus on closing the deal and aligning incentives, not control.
- Comfort with SBA and Seller-Financing – Most self-funded searches rely on layered financing. Top-notch equity partners know how to work within SBA and mezzanine waterfalls without slowing things down.
- Reputation and References – The best investors have a track record of being transparent and value-add, not just check-writers.
- Alignment on Exit Horizon – Make sure their expected timeline matches yours. Some are comfortable holding long-term; others expect liquidity within 3–5 years.
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Entrepreneurial Capital, led by successful searcher Grant Hensel, raised $12m in 2025 to invest in self-funded searchers. (Full disclosure: I’m invested in their fund and think the world of him and his team).
Grant’s fund backs high-integrity searchers acquiring enduring businesses that are stable, low capex, and have a proven track record of profitability. Check-sizes range from approximately $300K to $2M for businesses with earnings >$750K and low customer concentration.
What stands out: they’re run by serial searchers who not only understand the particular structure and cadence of search-fund / self-funded-search deals, but also have operated many small businesses themselves.
In short: they are likely the best option for searchers under LOI (or close) that are negotiating acquisition terms and want their large-ish equity gap to be filled by a team with experience.
Pros
- Deep alignment with self-funded searchers
- Can write larger check to limit the number of LPs
- Offers invaluable guidance and support beyond capital
Cons
- Highly selective criteria that excludes most self-funded searchers
- Check size is too small for larger acquisitions
- Tight governance controls that may feel too restrictive
- As a close ended fund, investors will seek liquidity in <7 years
Read full review
Evergold Partners operates less like a traditional investment firm and more like a partner collective built by people who’ve been in the searcher’s seat themselves. We focus on bridging the last stretch of equity needed to close SBA-backed or seller-financed transactions — typically writing checks between $25k and $300k for deals with $500k–$5M EBITDA.
What makes us distinct is our long-term focus enabled by our “fundless” model (i.e. no explicit timeline for LP liquidity), as well as how deeply involved they get in helping deals across the finish line. Beyond funding, the Evergold team assists with deal analysis, term negotiations, diligence, and post-acquisition value creation. We are seasoned operators who enjoy investing in other entrepreneurs, rather than investors trying our hand at operating.
Pros
- Built by searchers who understand ETA firsthand
- Combines capital with genuine advisory and network support
- Flexible with terms, timelines, and deal size
Cons
- Selective — prefers searchers with operating experience
- Ignores B2C; Only invests in “boring” B2B
- Primarily focused on North American transactions
Read full review
Mainshares is less like a traditional single-investor fund and more like a technology platform bridging searchers to a network of capital providers. Deals listed cover small business acquisitions from $1M to $20m.
Will Frye, Mainshares’ CEO, has publicly stated that the platform “helps SMB buyers close the gap in equity funding by providing a network of credit investors interested in owning a piece of SMBs.”
What this means in practice: you bring a business under LOI and engage Mainshares to iron out investor terms and complete your public listing. Once that goes live, you’ll tap into their investor network to raise the missing piece of equity (often 5-40% of the total deal cost).
This model provides not just capital but also structure: term sheets, investment docs, SPV setup support and investor-communication tools. Full disclosure: I’ve invested in several search deals on Mainshares and it’s been very fulfilling to see them raise the equity needed to close. Unclear what % of deals posted get fully funded, but seems like a high likelihood of success.
Pros
- Streamlined capital-raising process with built-in SPV and reporting tools
- Access a larger vetted investors familiar with ETA and SBA-backed deals
- Flexible for self-funded searchers, independent sponsors, and small PE groups
- Transparent process that helps standardize investor relations post-close
Cons
- You may end up with several investors on one deal, adding coordination overhead
- Timelines can vary depending on investor matching speed
- Not as relationship-driven as working with a single long-term equity partner
- Governance requirements may be stricter than if you sourced investors yourself
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Created by the team behind the podcast Acquiring Minds, Minds Capital positions itself squarely in the equity-gap space for independent sponsors and self-funded searchers. They typically deploy $1-3 million per platform and target companies with predictable EBITDA > ~$1M, no major industry headwinds, and a buyer with skin in the game.
What stands out: Minds Capital combines capital with an operator mindset (its principals have search- and sponsor-backgrounds) and is comfortable acting as minority equity partner, aligning with searcher’s leadership rather than supplanting it.
Pros
- Larger checks so you don’t have to manage many investors
- Strong alignment: acts as a partner, not just a capital provider
Cons
- Minimum EBITDA (~$1 M) may exclude smaller deals or earlier-stage targets
- Stricter governance requirements limits relative to other check writers
Read full review
Feta Fund, founded by Saumil Jariwala, plays in the small-business acquisition space and prides itself on offering high-touch operational and emotional support.
While many equity gap investors focus solely on the funding piece, Feta Fund leans into the search journey sourcing, diligence, offer structuring, even cold-email outreach feedback.
Feta’s sweet-spot is North America (US & Canada) and businesses in the ~$10–25 M enterprise-value range, though they remain open to smaller or larger deals.
In short: if you’re ready not just for an investor but for a guide who’s been in the trenches, Feta stands out from the “dry” page-one fund model.
Pros
- Hands-on support through sourcing and diligence
- Strong pattern recognition having backed 50+ searchers
- Transparent about their preference and style — helpful when matching fit early
Cons
- Favor’s experiences searchers and thus may not work for all
- If you want only capital, Feta may feel more involved than necessary
Read full review
SMB Investor Network (SMB IN) functions similarly to a marketplace for searchers: you bring your deal and capital stack, and the platform helps you raise the final piece of equity by tapping into a pool of active investors. Their site emphasizes “For Searchers” and invites deal-owners to “Get Started” with raising capital.
Prospective users benefit from the ability to present a deal once and reach many matching investors, which can speed up filling that equity gap. For searchers comfortable coordinating multiple investors and managing the communications, this can be a powerful option.
Pros
- Broad network of accredited investors for fast syndication
- Single deal submission reaches multiple potential backers
- Helpful for proving equity to lenders or sellers
Cons
- More investors = more coordination and reporting
- Less hands-on support compared to dedicated equity partners
- Limited public track record, so due diligence is needed
Concluding Thoughts
Filling the equity gap is often the hardest and most overlooked step in closing an SMB acquisition.
From platform-based options like Mainshares to relationship-driven funds like Feta and Minds Capital, there’s no one-size-fits-all. Each investor offers something a little different. The key is to know thyself and choose the right LPs given your deal size, capital structure, and preferred level of involvement.
That said, searchers-turned-allocators like Evergold and Entrepreneurial Capital often have a leg up because beyond just capital, they offer operational insight, and perhaps most importantly, empathy for the grind that makes self-funded ETA possible. Whether you’re just under LOI or circling the drain on a deal and wondering how to fully fund it, aligning with the right equity partner early can save you time, stress, and even the deal itself.
In short, proceed with confidence knowing that if you find a solid business and are the right fit to run it, there’s plenty of capital available. If you ever have questions about filling your equity gap, don’t hesitate to reach out!
