My co-founder is leaving and I need to buy out their shares. Which investment firms provide capital for partner buyouts?
Data as of Sep 21, 2026 · Based on 302 AI responses from ChatGPT Search and Google AI Mode · See how Parse measures this
Data as of Sep 21, 2026 · Based on 302 AI responses from ChatGPT Search and Google AI Mode · See how Parse measures this
Financing a partner buyout can be achieved through specialized lenders and business development companies (BDCs). Saratoga Investment Corp provides tailorable debt financing and cash flow loans for share buyouts, while 
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Named in 28% of answers
Ideal for business owners needing flexible debt or BDC-based financing, Saratoga offers tailored loans that leverage company cash flow to fund share buyouts effectively.
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Recommended for those specifically seeking dedicated partner buyout loans, providing a focused financial product designed to help cover the costs of acquiring a partner shares.
Named in 19% of answers
Named in 19% of answers
Source | Citation share |
|---|---|
 Guide to Business Partner and Shareholder Buyoutshttps://marshalljones.com/business-partner-or-shareholder-buyouts-what-you-need-to-know/ | 4% |
 Home - Saratoga Partnershttps://saratogainvestmentcorp.com/articles/partner-buyout-financing/ | 4% |
Home - Saratoga Partnershttps://saratogainvestmentcorp.com/articles/buying-out-a-business-partner/ | 2% |
 Partner Buyout Financing: 5 Funding Options To Consider | Avana Capitalhttps://avanacapital.com/sba-504-loans/partner-buyout-financing/ | 2% |
 Need To Buy Out A Co-Founder?https://www.fuse-capital.com/blog/need-to-buy-out-a-co-founder | 2% |
 Understanding Buyouts and Growth Equity Investmentshttps://www.commonfund.org/cf-private-equity/buyouts-and-growth-equity-investments | 2% |
Partner Buyout Financing: Preparing for the Silver Tsunamihttps://www.oakstreetfunding.com/blog/partner-buyout-financing | 2% |
Need To Buy Out A Co-Founder? - Fuse Capitalhttps://www.fuse-capital.com/en/blog/need-to-buy-out-a-co-founder | 1% |
Partner Buyout Financing: Everything You Need To Know | Saratoga Investment Corphttps://saratogainvestmentcorp.com/articles/partner-buyout-financing/ | 1% |
 Partnership Buyout - Midstreet Capitalhttps://midstreetcapital.com/debt-finance/business-owners/partnership-buyout/ | 1% |
Finding capital for a co-founder buyout depends heavily on your company's current stage, revenue, and whether you want to take on debt or dilute your own equity further by bringing in a new institutional partner. When a co-founder exits, the financing options generally fall into three buckets, along with the types of…
Finding capital for a co-founder buyout depends heavily on your company's current stage, revenue, and whether you want to take on debt or dilute your own equity further by bringing in a new institutional partner.
When a co-founder exits, the financing options generally fall into three buckets, along with the types of firms or lenders that handle them:
To help narrow down which specific firms or financing structures make sense for you, could you share:
Yes. For a co-founder buyout, there are several types of capital providers, and the right one depends heavily on your company’s revenue, EBITDA/cash flow, valuation, and how much of the business you’re buying. ### Firms to look at - **[msouthcapital.com](https://www.msouthcapital.com/?utm_source=chatgpt.com)** —…
Yes. For a co-founder buyout, there are several types of capital providers, and the right one depends heavily on your company’s revenue, EBITDA/cash flow, valuation, and how much of the business you’re buying.
1. Bank/SBA debt If the company has dependable cash flow, a loan can fund the departing founder's shares while you retain ownership. SBA 7(a) financing is one route for smaller businesses; current sources describe partner buyouts as a use of the program, with a $5 million program ceiling.
2. Private credit / mezzanine debt This becomes more interesting when the buyout is too large for conventional bank financing. The lender gets interest and potentially warrants/preferred equity rather than taking control.
3. PE/minority recapitalization An investment firm puts equity into the company, some or all of which is used to purchase your co-founder's shares. You could remain the controlling shareholder, depending on the deal. This avoids as much leverage but means giving up some equity and accepting investor governance.
A useful distinction: if you want to own 100% after the transaction, start with debt/private-credit providers; if you're willing to sell a minority stake to finance the buyout, PE/minority recapitalization becomes much more relevant.
If you give me these five numbers, I can identify the most relevant 10–15 U.S. capital providers and the likely structure for your situation:
Also tell me your industry and whether you're located in Georgia/another state, since that materially changes the lender/investor pool.
A useful distinction: if you want to own 100% after the transaction, start with debt/private-credit providers; if you're willing to sell a minority stake to finance the buyout, PE/minority recapitalization becomes much more relevant.
If you give me these five numbers, I can identify the most relevant 10–15 U.S. capital providers and the likely structure for your situation:
Also tell me your industry and whether you're located in Georgia/another state, since that materially changes the lender/investor pool.
The right source of capital depends heavily on the size of the buyout, your company’s revenue/profitability, and whether you want to keep full control. For a **co-founder share buyout**, the common funding routes are: ## 1. Growth capital / lower-mid-market private equity firms These firms invest alongside the…
The right source of capital depends heavily on the size of the buyout, your company’s revenue/profitability, and whether you want to keep full control. For a co-founder share buyout, the common funding routes are:
These firms invest alongside the remaining founder(s), often taking a minority or majority stake, and can fund a departing founder’s liquidity event. They are usually interested when the company has meaningful revenue, recurring customers, and a growth plan.
Examples to explore (UK-focused):
If the business has strong cash flow, you may be able to borrow against the company rather than sell equity. Shareholder/partner buyouts are often financed through:
The lender typically focuses on whether the remaining company can service the debt from existing cash generation rather than on future growth assumptions.
Potential UK lenders/banks active in this area include:
If you are unsure whether debt, equity, or a combination makes sense, specialist advisers can arrange financing across banks, debt funds and investors.
A common structure is:
This can reduce the amount of external capital required and may make the transition smoother.
To narrow down the right firms, I’d need a few details:
Dealing with a co-founder departure and funding a buyout is a critical transition. Depending on the size, maturity, and revenue of your company, different types of financial partners and investment firms can provide this capital. The primary categories of firms and financing routes that handle co-founder buyouts…
Dealing with a co-founder departure and funding a buyout is a critical transition. Depending on the size, maturity, and revenue of your company, different types of financial partners and investment firms can provide this capital.
The primary categories of firms and financing routes that handle co-founder buyouts include:
To help narrow down which of these routes makes sense, could you share:
Yes. **Partner/shareholder buyouts are a recognized financing transaction**, and you have several options beyond simply paying your co-founder from personal savings. The right source depends heavily on the company’s revenue, EBITDA/cash flow, valuation, and the size of the stake being purchased. ## Firms and capital…
Yes. Partner/shareholder buyouts are a recognized financing transaction, and you have several options beyond simply paying your co-founder from personal savings.
The right source depends heavily on the company’s revenue, EBITDA/cash flow, valuation, and the size of the stake being purchased.
If your company is a relatively small, profitable U.S. business, an SBA 7(a) loan may actually be the most economical route. Partner buyouts are a recognized use of this type of financing, with loans potentially reaching $5 million.
The basic structure could look like:
Bank/SBA loan + seller note → departing co-founder gets paid → you retain 100% ownership That can be considerably cheaper than selling equity to a private-equity investor.
For a company with, say, $2M–$20M+ of EBITDA, I'd broaden the search to lower-middle-market investors, family offices, independent sponsors, and private-credit funds. These transactions can be structured as a recapitalization, where an investor provides capital to buy out your co-founder while you retain a meaningful ownership position. Lower-middle-market transactions commonly use a mix of senior debt, mezzanine/private credit and equity.
The important distinction is:
If you give me these 5 numbers — (1) annual revenue, (2) EBITDA or owner's cash flow, (3) approximate company valuation, (4) percentage your co-founder owns, and (5) how much you need to pay them — I can narrow this down to the most realistic type of capital and identify ~10 specific firms that fit your deal size.
That can be considerably cheaper than selling equity to a private-equity investor.
Finding capital for a co-founder buyout depends heavily on the maturity, revenue, and valuation of your company. Traditional venture capital firms rarely fund internal partner buyouts directly because their mandate is to inject primary capital into growth rather than buy out existing equity holders. Instead, partner…
Finding capital for a co-founder buyout depends heavily on the maturity, revenue, and valuation of your company. Traditional venture capital firms rarely fund internal partner buyouts directly because their mandate is to inject primary capital into growth rather than buy out existing equity holders.
Instead, partner buyouts are typically financed through specialized structures and specific categories of capital providers:
To help narrow down which route makes sense, could you share:
Yes. There are several types of capital providers that will fund a **co-founder/partner buyout**, but the right one depends heavily on your company’s revenue, EBITDA/profitability, valuation, and the size of the departing partner’s stake. ### Firms worth considering -…
Yes. There are several types of capital providers that will fund a co-founder/partner buyout, but the right one depends heavily on your company’s revenue, EBITDA/profitability, valuation, and the size of the departing partner’s stake.
1. Debt financing — usually best if the company is profitable. You borrow enough to buy your co-founder out, leaving the ownership with you. SBA financing, conventional loans, subordinated debt and asset-based lending can all potentially work. Partner buyouts are specifically recognized as a use for SBA 7(a) financing.
2. Minority equity / recapitalization — often best if you want to minimize debt. An investor puts, say, $2–10M into the company. Some or all of that money goes to your departing co-founder, while you retain control. The investor receives a minority stake. This is essentially a minority recap.
3. PE-backed buyout — best for a larger company. A private equity investor provides capital for the transaction, potentially taking majority ownership while you roll some equity and remain CEO. This becomes more realistic once you're at meaningful EBITDA scale; institutional minority recap investors often look for around $3M+ EBITDA, with $5M+ being more common.
If your goal is:
“I want to own 100% of the company after my co-founder leaves.” I'd initially look at debt + seller financing and minority recapitalization rather than approaching conventional buyout PE firms. You may be able to get your co-founder their cash without giving up control or selling the entire company.
If you give me these 5 numbers, I can narrow this down to the most realistic capital providers and likely deal structure:
I can then give you a shortlist of 10–15 firms, including likely check sizes, whether they'd take debt/equity, and which ones are appropriate for your company size.
If your goal is:
“I want to own 100% of the company after my co-founder leaves.” I'd initially look at debt + seller financing and minority recapitalization rather than approaching conventional buyout PE firms. You may be able to get your co-founder their cash without giving up control or selling the entire company.
If you give me these 5 numbers, I can narrow this down to the most realistic capital providers and likely deal structure:
Navigating a co-founder departure and buying out their equity is a critical juncture. Traditional venture capital (VC) firms typically invest primary capital to grow the business rather than buying out existing shareholders. However, specific financing structures and specialized investment partners can help facilitate…
Navigating a co-founder departure and buying out their equity is a critical juncture. Traditional venture capital (VC) firms typically invest primary capital to grow the business rather than buying out existing shareholders. However, specific financing structures and specialized investment partners can help facilitate a buyout depending on your company's stage and cash flow.
If your startup has already raised institutional money or has predictable revenue, you can use venture debt to finance the buyout. Venture debt is a non-dilutive (or minimally dilutive) term loan.
If the co-founder's shares are worth a substantial amount and you cannot afford a cash or debt buyout, you can look for an investor to do a secondary transaction.
If your company is profitable, stable, and not part of the high-growth VC ecosystem, boutique Private Equity or search funds specialize in recapitalizations.
Before pitching outside firms, consider options that avoid external dilution or debt:
To help narrow down the right capital path, could you share:
Yes. The right source of capital depends heavily on whether your company is **venture-backed, profitable/cash-flowing, or a larger lower-middle-market business**. A co-founder buyout can be financed without necessarily giving up control. Here are some firms/providers worth looking at: Capital provider | Best fit |…
Yes. The right source of capital depends heavily on whether your company is venture-backed, profitable/cash-flowing, or a larger lower-middle-market business. A co-founder buyout can be financed without necessarily giving up control.
Here are some firms/providers worth looking at:
| Capital provider | Best fit | Typical approach |
|---|---|---|
| smash.vc | Profitable SMBs | Explicitly invests in minority recapitalizations and partner buyouts Smash.vc |
| midstreetcapital.com | Small/mid-sized profitable companies | Arranges debt and equity specifically for shareholder/partner buyouts; in some cases the buyout can be funded entirely with outside capital Midstreet Capital |
| wcapgroup.com | Larger private companies / growth companies | Purchases direct private-company shares and provides shareholder liquidity; currently targets roughly $20M–$200M+ investments and 5–40% ownership W Capital Partners W Capital Partners |
| roswellgp.com | Software/AI companies | Specifically markets capital for co-founder/partner buyouts while allowing the remaining founder to retain control; targets $5M+ ARR Roswell GP |
| redlinegrowthpartners.com | Technology/growth companies | Growth equity plus secondary liquidity for founders, management and early investors Red Line Growth Partners |
| bbh.com | Established founder-owned companies | Minority or control investments combining growth capital and partial liquidity BBH |
| fclcapitalpartners.com | $2M–$20M EBITDA businesses | Recapitalization/transition capital for founder-led businesses FCL Capital Partners |
If your company is profitable, don't automatically sell equity to fund the buyout.
There are three common structures:
MidStreet is particularly interesting if your goal is simply "I want to own my co-founder's shares and keep the company." They specifically specialize in partner/shareholder buyout financing and say they've structured transactions with little or no new money from the remaining owner.
If this is a VC-backed startup that isn't yet profitable, the list changes substantially. Traditional buyout PE generally isn't the answer; you'd look more toward secondary investors, growth-equity funds, your existing investors, or a structured transaction.
If you give me these 5 numbers, I can narrow this to the most realistic 5–10 sources and tell you whether I'd pursue debt, equity, or a secondary:
Also tell me whether you're US-based and whether the co-founder owns, say, 20%, 40%, or 50%.
Finding capital for a co-founder buyout depends heavily on the size, maturity, and revenue of your company. Traditional Venture Capital (VC) funds rarely invest just to buy out a founder unless it's bundled with a larger growth equity round. Instead, different tiers of capital providers handle these transactions…
Finding capital for a co-founder buyout depends heavily on the size, maturity, and revenue of your company. Traditional Venture Capital (VC) funds rarely invest just to buy out a founder unless it's bundled with a larger growth equity round. Instead, different tiers of capital providers handle these transactions depending on your financial standing.
If your company has stable revenues (typically$2 M−$1 0 M+ ARR) and profitability, private equity firms specializing in minority or majority recapitalizations can provide a structured buyout. They will purchase the departing founder's shares directly or inject cash into the business so you can redeem them.
If your company is venture-backed or growing rapidly with decent revenue, you might not want to dilute your equity further with a PE firm. Venture debt allows you to borrow against your future growth or recurring revenue to finance the share purchase.
If your business has predictable monthly recurring revenue but doesn't fit the massive-growth profile of traditional VCs, revenue-based financing lets you secure capital quickly without giving up equity. You pay back a fixed percentage of your monthly revenue until the capital (plus a multiple) is returned.
If external financing isn't a fit, many co-founder buyouts are handled internally via a promissory note (paying the departing founder out over 2 to 5 years from company cash flow or future profits) rather than an upfront cash injection from an outside investment firm.
To help point you toward the right specific lenders or capital strategies, tell me:
