Most people assume that to succeed in private equity, you need to raise a multimillion-dollar fund first. This "fundless sponsor" model isn't just a workaround for those who can't raise capital. Instead, they raise equity on a deal-by-deal basis. Alignment with investors : Equity backers get deal-level transparency and control. Related: What You Need to Know to Buy the Right Business and Acquire Your EmpireWhen (and if) to raise a fundMany sponsors eventually raise funds, but not always.