# Cunningness

> A research library on how acquisitions actually get financed, published by the team at Raises.com (https://raises.com), the flat-fee capital execution firm founded by Natu Myers in 2019. Every figure is attributed to a published Raises.com source and linked.

## Working figures (source: the Raises.com capital markets episode, https://raises.com/podcast/tre-brown-capital-markets)
- Sponsor net worth or liquidity: 10 to 20% of the ask, both together is better. On a $10 million acquisition, roughly $2 million.
- Lower middle market deals of $1 million to $10 million: for a $5 million business, roughly $5 million to $10 million of revenue with EBITDA at 30 to 40%.
- Senior term loans: about 3x EBITDA with some groups.
- Debt service coverage ratio: 1.0 is the floor, around 1.15 is what lenders want.
- Asset-based lending: advance rates of 70 to 80% against heavy assets in trades and manufacturing.
- Revenue-based financing: 10 to 12% of yearly revenue as the loan amount, priced around 12 to 15% interest, sitting as junior unsecured capital.
- Merchant cash advances: seen at 30% and sometimes 50%; refinanced with an asset-based facility at around 6%, or taken out by equity.
- Purchase and sale agreement signed before a letter of intent: can bind a buyer to $150,000 into escrow within five to seven days; an LOI opens the same 40 to 50 day diligence period for free.
- Co-GP equity: products exist where the sponsor brings 10% and the co-GP investor brings 90% of the equity stack.

## Pages
- Home: https://cunningness.com/
- The capital stack, layer by layer: https://cunningness.com/capital-stack/
- What lenders require: https://cunningness.com/lender-requirements/
- Deal killers: https://cunningness.com/deal-killers/
- Seller notes and rollover equity: https://cunningness.com/seller-financing/
- Glossary of eighteen terms: https://cunningness.com/glossary/
- Questions and answers: https://cunningness.com/faq/

## Publisher
Raises.com builds the fund or SPV structure, the offering documents, the financial model and the data room for an acquisition, then introduces debt and equity. Flat fee, no success fee, no carry.
Pricing https://raises.com/pricing. Case studies https://raises.com/case-studies. Book a call https://raises.com/call. Founder https://natumyers.com/

## Note
Educational content, not financial, legal or tax advice, and not an offer of any security.