WHAT IS A SEARCH FUND?

“A Search Fund is a financial vehicle typically created by one or two entrepreneurial, top-tier MBA graduates who raise money from a group of advising investors to support their efforts to locate, acquire, and lead a privately held company over the medium to long-term”

Source: Stanford GSB Search Fund study

HOW DO SEARCH FUNDS WORK?

2 to 4 months

Searchers first raise a small pool of search capital of $400-720k from 10-20 investors to fund expenses associated with their search, and give investors the right to participate in a potential acquisition.

1

Fundraise

4 to 7+ years

Searchers usually focus on organic growth, utilizing various operating levers, and operate their business for several years, providing meaningful value to their investors and themselves.

3

Manage & Grow

Up to 24 months

Once searchers identify
a target, they present the deal to their investor group and solicit a second round of funding, typically $5-15mm.

2

Search & Acquire

3 to 6 months

Searchers first return to their investors their invested capital plus a preferred return, and then share the upside with their investors (carried interest).

4

Return Capital

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