The Search Fund Shutdown: Unpacking the SBA's Latest Stance feat. Sam Rosati | Ep. 61

This week on The BDO Show, we're cutting through the noise surrounding the SBA's recent notice on search funds and preferred equity. What does the new guidance really mean for acquisition entrepreneurs, investors, and the future of small business acquisitions?

Host Emily Detor is joined by Ray Drew, and special guest Sam Rosati, co-founder of Perimeter Solutions Group and a serial entrepreneur in the acquisition space, to unpack the implications of these changes in real-time.

Sam, a former Wall Street lawyer who built his own portfolio of businesses through acquisition, offers a unique perspective on how the SBA's stance on search funds and preferred equity could reshape the landscape for buying and selling small businesses.

🎯 In this episode, we tackle:

➡️ The true meaning behind the SBA's "search funding" notice and its impact on the acquisition entrepreneurship ecosystem.

➡️ Preferred equity vs. common equity: What's allowed, what's preferred, and why the SBA is scrutinizing investor agreements.

➡️ The controversy around "side agreements" and investor control, and what it means for the guarantor's role.

➡️ The unintended consequences of the new rules on deal flow and access to capital for aspiring entrepreneurs.

➡️ Why the SBA might be missing the real problem, and alternative solutions to address concerns about loan performance and distributions.

💬 Is the SBA's new guidance a necessary correction or an overreaction that could stifle small business acquisitions? Join the debate and let us know your thoughts!

🎙This episode is sponsored by:

Rapid Business Plans

Rapid Business Plans is the go-to provider of business plans and feasibility studies for government guaranteed small business lenders. For more information, or to set up a Get Acquainted call go to https://rapidbusinessplans.com/art-of-sba.

Peak Business Valuation

Peak Business Valuation has put together a free resource just for BDO show listeners, listing out the rule-of-thumb formulas for common industries financed by SBA lenders. Get yours today at peakbizval.com/BDOshow.