Are you crazy to Search in an industry you never operated?

May 03, 2026

by a searcher from Columbia University - Columbia Business School in Jacksonville, FL, USA

Lots of PE employees, Independent Sponsors, and Searchers end up pursuing companies in businesses that they have never operated. A lot of operating executives would find this ridiculous. So, why do we do it? How quickly can you "learn" an industry? Searchfunder needs a polling system.

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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

It can be an issue to look in an industry you have no experience in if it is an extremely complex industry or requires licensing. Just about all lenders are focused on buyer experience and how it will translate to the business. However, there are many businesses where just solid business experience will work or where there are good teams in place that can make up for the buyer experience gap. So it really depends on the business you are looking to buy. It also depends on the strength of the deal. If you have strong financials and a good debt service coverage ratio, then lenders might be less worried about direct industry experience. But if the deal has a lot of other higher risk components to it, not having an experienced borrower will add to that risk and make it much harder to get a deal financed. If you would like to discuss further you can reach me here or directly at redacted Good luck with your search.

Reply by a searcher
from University of Saskatchewan in Calgary, AB, Canada

I would not describe this as crazy whatsoever (in fact, I'd call it exhilarating!) - but be ready to drink from the firehose for awhile if you transact! Also, realize that whatever your spreadsheet says is about 10x more full of holes than usual and missing a LOT of key assumptions! :) In my experience, with deep immersion you can learn enough about a new industry in###-###-#### quarters to be pretty dangerous. Being able to really assess the human capital of the business is critical though - you're not an expert on day 1 so you need to be buying some to help you along.

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