Learnings from your unsuccessful search

by a searcher from Indian Institute of Management Bangalore

3 years ago

We hear a lot from successful searchers and investors here. Would anyone be willing to share why their search did not succeed (I.e. they were unable to find or close a deal), apart from just luck? It would help us and the community learn from your experience and do better in our searches. Thank you!

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7 comments

searcher from Northwestern University - Kellogg School of Management

Thomas, very well said and is consistent with my conversations with searchers that closed and do not close on an acquisition.

3 years ago | like reply | 0 likes

investor from University of California, Berkeley - Haas School of Business

IMO, the primary reason why traditional searches fail are: 1. Unable to identify a target that meets the narrow investment criteria of professional SF investors, 2. SF investor IRR expectations are above those of many LMM PE firms (who also have committed capital), causing searchers to lose in most competitive sales processes for good companies, 3. Proprietary deals are increasingly becoming more difficult to find due to technology advances which allow a larger number of market participants to reach out to potential targets (databases, email marketing, etc.), 4. searcher realizing that running a small company with the SF model is not the right fit, the searcher economics are not attractive enough, or the opportunity cost of searching is too high. From a searcher perspective, some of these risks can be mitigated by going with a self-funded search.

3 years ago | like reply | 1 like

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