I am contemplating a search that would be local or in a tight region. However, I am in one of the largest USA cities. With that, the traditional search fund model is pretty much out of the picture.
I'm wondering if anyone has had any success executing a hybrid search? My strategy will be to go to investors once I have deals under LOI and, if the deal moves forward to request capital for due diligence. Would investors consider this? If so, would they be the traditional SF investors?
Essentially my search would be similar to a traditional search with a constrained region, no salary, and raising the due diligence capital on an ad hoc basis.
Is this possible? If not, what are some of the popular hybrid models?
Hybrid Search Model Structures
by a searcher
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Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
However, if the deal doesn't close, any due diligence costs would be dead deal expenses. That's just the cost of doing business. IF you really need to, I'd recommend trying to hit up friends/family for a loan to cover those expenses, not asking investors to front the money for diligence expenses that they'd have to eat if the deal falls through.