After a long wait, it is finally here: a new academic paper on the search fund model's application in German markets.

"Is business succession by the search fund model an option for Central Europe?" (Freiling & Oestreich, 2022, EBER Vol. 10, No. 2)

For those, who are interested, you can find the article here: (open download) and the abstract here:

Introduced in the 1980s in the USA, the search fund model as a niche financial instrument of entrepreneurship through acquisition has not yet become popular outside North America. This article responds to the question whether search fund could be an interesting model for Central European countries with an increase in business successions.

A qualitative content analysis of interview data from eight cases from German-speaking countries allows analysing the context and experiences, as this is the region with the most cases of applications within Central Europe to date.

The results reveal the entrepreneurial intent of the searchers, the searcher’s confirmation of the theoretical advantages of the search fund model, and the low popularity of the model in the German-speaking markets due to scepticism and hindering factors like the criteria catalogue, market idiosyncrasies, competition of private market investors, and lower control of choosing and running a target company. Furthermore, these markets offer well-established financing alternatives which makes searchers choose alternative models.

Because the search fund model as niche model does not tap its full potential, a transfer of best practices between different regions in the world is beneficial. Moreover, platforms connecting successors, funders, and predecessors may be useful in this regard.

The study offers first empirical insights on adoption factors of the search fund model in German-speaking markets: in so doing, it sheds light on preferences and concerns of the parties involved, with the aim to facilitate the model’s future application all-over Central Europe.