Interested in starting a search fund?
For talented entrepreneurs who want to have ‘skin in the game’ while operating a successful business, the search fund model provides access to capital, expertise, and partnership.
Why Top Entrepreneurs Choose the Search Fund Model
For experienced leaders who aspire to own their own business and serve as CEO, entrepreneurship through acquisition is a tested model with an attractive balance of risks and rewards and tremendous long-term growth potential.
What is a Search Fund?
A search fund is an investment vehicle formed to support an entrepreneur as she or he identifies and acquires a small business. The search fund model includes four distinct stages.
Stage 1: Formation
Entrepreneurs raise an initial round of capital to support the search process. Most funding typically comes from institutional firms and individuals who are active search fund investors.
Stage 2: Search
During this stage, the entrepreneur works to identify an acquisition opportunity, generally driven by an industry thesis. Entrepreneurs will examine hundreds, if not thousands, of companies to find a great opportunity at a fair price. Due diligence begins with the first contact with a potential acquisition.
Stage 3: Acquisition
In the acquisition phase, the entrepreneur negotiates the terms of the deal and raises a second round of capital from investors. Once the parties agree and diligence is complete, the transaction is closed and the transition to the new ownership team begins.
Stage 4: Operation
The entrepreneur assumes the CEO role, often supported by the former owner through a transition period. During this phase, the CEO and leadership team become true experts in the business and set a path for profitable growth. A board of directors helps the new principal(s) make strategic decisions and provides functional support as needed.
If you're pursuing a search fund, consider us a thought partner.
In the search fund world, time is your most precious resource. It’s a great time to start a search fund! If you’re ready to take the next step, contact us.Contact