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The Prox Search Capital team walking through downtown Denver

Capital for entrepreneurs acquiring great businesses.

We partner with independent sponsors and acquisition entrepreneurs to invest in established lower middle market businesses.

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Investment Strategy

Minority equity for lower middle market acquisitions.

PROX Search Capital provides equity capital for lower middle market acquisitions led by independent sponsors and acquisition entrepreneurs. We specialize in minority, non-control investments and bring a practical understanding of deal structure, transaction and closing dynamics, transitions, and operating a business.

Focus
Established lower middle market businesses
Business Size
Adjusted EBITDA of $1M–$5M
Industry
Agnostic, US based
Ownership Target
Minority, non-control equity
Investment Size
$500K–$2.5M
Why PROX

Capital that gets it.

We bring flexible capital, transaction experience, and a partnership mindset to every deal.

  • Deal fluency

    We know the deal

    We have sat on both sides of the table. We read a capital stack quickly and tell you where we land.

  • Speed

    We move at deal speed

    Sponsors need answers, not process. We underwrite efficiently and communicate clearly throughout.

  • Structure

    We are flexible

    Capital structures, sponsor roles, and transaction dynamics vary. We evaluate each deal on its merits.

  • Restraint

    We back you to run it

    You and your management team run the business. We bring an investor’s perspective when it is useful.

Our Approach

How we underwrite.

Our underwriting is focused on what matters most: the sponsor and operator, the quality of the business, and the economics of the transaction.

  1. 01

    Initial Fit

    Does the opportunity fit our investment criteria?

    • Industry
    • Size
    • Geography
    • Transaction structure
  2. 02

    Sponsor

    Is this the right team to lead the investment?

    • Experience
    • Track record
    • Business fit
    • Alignment
  3. 03

    Business

    Is this a high-quality, durable business?

    • Financial performance
    • Customers
    • Market
    • Growth opportunities
  4. 04

    Deal Economics

    Does the transaction work at the proposed terms?

    • Valuation
    • Capital structure
    • Leverage
    • Returns
  5. 05

    Investment Decision

    Bringing it all together.

    • Diligence
    • Structure
    • Risk and return
    • Final approval
What We Invest In

What a fit looks like.

We seek highly-motivated sponsors who are focused on acquiring stable, profitable lower middle market businesses with strong margins and clear growth potential.

See the full criteria

Business profile

  • History of operations and profitability
  • Stable and recurring revenue
  • Seller has a valid reason to exit, such as retirement
  • Adjusted EBITDA of $1M–$5M
  • Stable or growing industries
  • Limited customer concentration
  • Opportunities to create value and growth
  • Industry agnostic: business services, specialty manufacturing, consumer and home services are common examples

Sponsor profile

  • Highly motivated and hands-on
  • Strong strategy for value creation
  • Relevant operating, investing, or transaction experience
  • Excellent communication and management skills
  • Meaningful personal investment in the transaction
  • Thoughtful and balanced economics

Have a deal under LOI?

Send us the opportunity. We will read it, ask real questions, and tell you quickly whether it is a fit.

Submit a Deal Email Us