McGuireWoods Charlotte partner J.D. Costa discussed advising independent sponsors and handling deal challenges on a recent episode of the podcast, “Perspectives of the Ever-Evolving Independent Sponsor Universe,” hosted by private investment firm Source Capital.
On the episode, Costa joined Joe Rodgers, managing director at Source Capital; Doug Song, managing partner at Prodos Capital; Ronan McIntosh, managing partner at Chinook Investment Partners; and Ryan Murphy, managing director at LCG Advisors.
Costa, who co-leads the firm’s Private Equity Transactions Practice Group, discussed how the firm’s long relationships in the industry make it a go-to resource for potential new sponsors and helping them build meaningful connections. The growing interest in the deal-by-deal strategy is evident in McGuireWoods’ annual Independent Sponsor Conference which has grown from 270 attendees in 2017 to 1,600 in 2025 — representing nearly 6x growth over the past decade.
Costa also weighed in on the rising prevalence of broken deal costs, an issue he said sponsors historically avoided discussing openly for fear of unsettling capital sources, but which has become a regular part of the conversation industry-wide. He shared how newer sponsors can find themselves exposed once advisors are engaged, and what he tells clients about protecting themselves before the diligence clock starts running.
The conversation touched on other broad ranging topics, such as how sponsors are structuring exclusivity periods, allocating diligence costs with sellers on deals, and trends in sponsor-to-sponsor partnering to get the first deals done.
As the independent sponsor market continues to mature, the full episode offers a candid look at where the industry is headed next. The conversation continues in person at the McGuireWoods Independent Sponsor Conference, Oct. 27-28 in Dallas, now it its 9th year. Registration is now open.
McGuireWoods represents independent sponsors and capital partners in majority and minority equity investments. In addition to hosting the leading national conference, the firm provides unparalleled resources across the independent sponsor community through year-round networking groups, curated introductions, and online resources. For more information, click here.