Baby Steps into a search fund/micro PE?

October 20, 2020

by a searcher from Rose-Hulman Institute of Technology in Fort Wayne, IN, USA

While I don't have plans to start a search fund in the near future, acquiring a business or starting a Micro PE fund is something I"m extremely interested in the long-term. I've ran across a few geographically based micro PE firms and am very intrigued.

Are there any ideas for baby steps down this path without actually searching for/buying a company, specifically with a geographic focus?

Some ideas I've had with intent of getting more small business experience & getting to know the community more:
- offer pro bono (to start) consulting services to small businesses (with current network believe I could get a few companies)
- start a podcast interviewing local business owners (again, geographically focused)

what do you think? are there any other ideas?

Reply by a searcher
from University of South Carolina in Great Falls, VA, USA

From the get your feet wet first approach, I've been building up my self funded search fund by buying smaller businesses, mostly digital sites and such. Just sold a collection of affiliate content sites for about 2.5X of what I bought them for 9 months ago. Putting that into a few slightly larger properties that are directionally correct with my longer term goals. This next step will be to use these new properties as the foundation of my search for businesses in the $2.5 to $8 million range.

Also look at the microaquistions course, check out flippa or such. Buy something small with a little revenue, make sure you can lose that money if you had to, play with it and see if you can grow it. Their are all sorts of crazy niche marketplaces beyond websites. The skills you'll need for a more traditional search fund will probably be a bit more sophisticated but you will find out a lot about your gut by going through these steps while you're still figuring out your long term goals.

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