I founded and bootstrapped a B2B SaaS product. I ran it for over 7 years, developed new products (some successful, some not) and built the team. It consistently grew until I sold it last year for a 7-figure exit.
I'm now looking to acquire product(s) in the same industry. I don't want to do it alone since I think the right partners can multiply my success this time, both through support and leverage to acquire larger businesses.
The traditional search funder model is interesting since, frankly, spending two years full-time on a self-funded search that doesn't acquire anything is not an option.
I have people in my network who have expressed interest in investing in products I acquire with me as the operator. We haven't discussed funding the search portion.
From what I've read, the search funder model caters mostly to MBA grads. With my experience and connections, I feel the search and operations parts are de-risked somewhat.
I'm interested to hear from others, both searchers and investors, who've used the model (or have found it not to work) for those who have operational experience. Specifically, how is the searcher perceived and is this reflected in different terms?
Different terms for a searcher with SaaS industry experience?
by a searcher
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1. The velocity of deals in the digital/Shopify app space is very fast. Also, the level of DD you can do on these deals is limited. These aren't businesses with long history, employees and assets. Most people I know buying these are closing deals in###-###-#### days.
2. If you can sustain yourself and bring in outside capital. Just do it once you have deals spotted that are too big for your own capital, or you just want to minimize risk.
IMO you would give up way too much control/equity going the search route just to have someone pay you a 60K salary for the next###-###-#### months. Also, it's more likely in Shopify app space you will close more than 1 deal rather quickly.
A key difference between a search fund, private equity fund, or SPAC is branding. I'm purposely oversimplifying, but the model is fundamentally the same - raise money, find a deal, close a deal. Do you see yourself as the young/hungry operator ready to pound the pavement to add value via your operational leadership? Do you see yourself as the builder who can amplify businesses that you rollup (1+1=3)? Do you see yourself as the dealmaker who has a unique financial opportunity that your experience gives you an advantage with? How you are perceived and the deal terms you get begin with how you perceive yourself, and the deal terms you seek.