How about the intersection of ETA and Tech?

searcher profile

January 24, 2019

by a searcher from United States Military Academy in Hawaii, USA

In terms of industries, ETA seems to have a significant presence in IT-enabled services. 

But what are the industry prospects for searchers interested in targeting the actual TECH sector? 

Or are these firms simply too far left in the industry lifecycle? 

I admit--I'm rather bright-eyed and bushy-tailed about ETA, but I am excited about the prospects of acquiring and growing a company that develops into a disruptive force in the industry.

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commentor profile
Reply by an investor
from University of California, Berkeley in Moorestown, NJ 08057, USA
I'll take a shot at an answer - one of the tenets of Searchfunds and the Search process is that smaller, mature businesses are less risky than startups. Another is that businesses in mature industry segments and of the size most searchers look for sell for more affordable multiples than the future unicorns of Palo Alto. If you are able to find a small tech company that has achieved product-market fit, has revenue and is profitable but is not being circled by VCs and strategics then you may get lucky but I would guess that would be a very tough find and the multiple would be a fair bit higher than the average small company that a searcher looks for Just one man's opinion.
commentor profile
Reply by an investor
from Harvard University in 1113 Spruce St, Boulder, CO 80302, USA
TPE Boulder specializes in software and tech investments, mostly from search fund acquisitions. There are a few others similarly focused and many who are open to tech investments. We have participated in 13 tech acquisitions from search funds in the past 5 years. They are out there, just requires perseverance and yes, we have always paid less than 8.0X EBITDA.
commentor profile
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