Are there any other investors that do this? As in, take 5-10% of their total available capital and just spread it around across several different acquisitions.
If the return of the acquisition/search model is 20+% for the investors and I find the deals and invest in them individually I should have a certain degree of diversification across sectors. I assume this is what the various "search fund - funds" do.
Obviously this relies on my own ability to value deals, but assume I was half way decent at it, how do you think I would do over a 5-7 year window?
$100k into 10 separate deals to create my own "mini index fund"?
by an investor
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We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
What is the limitation on what can be self funded? I saw an offering where the self funded searcher was buying a business for $8 million and seeking a 25% equity injection from investors. EBITDA multiple was about 4x. He was covering all of the legal and admin costs.
If you can cover the searching, admin and legal fees and the deal is good enough to attract 25% equity investment what is limitation to the size of business you can buy? What is the key barrier?
Congrats on getting a couple of early prospects, just from this posting! And I'm glad to see that searchfunder still works connecting people and deals. This is a great, collegial community as I said :)
Maybe there is more opportunity with self-funded, smaller enterprise value deals that I give credit for. I always presumed that, in today's market, a $400k equity value deal would be funded by friends & family with an SBA loan, or something like that. When those searchers do indeed seek outside capital, I think they often request healthier equity stakes (e.g., 60% of common). I can tell you that, as enterprise values shrink, the number of companies available for sale goes up exponentially. That means you have to work harder to separate the wheat from the chaff. Tread carefully and vet your new partners (as I'm sure you know).