Any recently funded traditional searchers that can chat about terms?

searcher profile

September 20, 2023

by a searcher from Massachusetts Institute of Technology - MIT Sloan School of Management in Miami, FL, USA

Putting together my PPM and I'm wondering what the current market is for a solo searcher as far as round size, and budget items (i.e. salary, diligence costs, etc.).
I am about 12 years out from my MBA if that makes any difference in salary, etc.

4
95
823
Replies
95
commentor profile
Reply by a searcher
from IE Business School in Madrid, Spain
I’m raising my fund in Spain where salaries are lower than the U.S. The budget should be focused on being coherent with your search strategy. Money for interns, due diligence, crm, subscriptions etc (although some due diligence costs will be funded out of the acquisition capital) based on your approach. There is also signaling aspect that you will be frugal with investor money. That being said salary should cover your expenses in order to focus full time on the search and not be a source of stress. Having children and mortgage should be taking into account and and older searcher will have a different cost structure than a recen full time MBA grad. The important thing is that you don’t appear to be trying to build savings or improve your lifestyle with the proposed search salary. I would suggest Jan Simon’s book that goes into a lot of these issues in detail and speak to searchers who have raised recently living near you as they will have a feel for the market.
commentor profile
Reply by a searcher
from University of Victoria in Vancouver, BC, Canada
Can we dig into the other terms that you folks are offering investors as well please? (If you'll indulge me in some dumb questions as I'm new to the terms)... Happy for answers on any individual points here if there's some expertise or ideas.
1 - Investors get paid back 100% of salary costs, is the expectation that all costs of the search including failed DD is also returned fully?
2 - Is there any expected return on this initial search capital?
3 - If you raise funds from say 4 investors for the search capital of say $500k, and then close in on a deal... how have you managed interest from those 4 investors as to who can get in on the deal? If one investor wanted to put up all of the capital would you let them, or would you let them buy in proportionately to what they contributed to the $500k
4 - Is the expectation that the searcher also contribute capital to the fund? Or just at the purchase?
commentor profile
+93 more replies.
Join the discussion