Multiple Companies out of a singular Search Fund/Self Funded venture

April 04, 2022

by a searcher from Boston University in Cupertino, CA, USA

Hello Community,

Thanks for all the conversation on this platform. Past 2 weeks have been a learning journey reading your thoughts, opinions & passion for ETA. I'm an experienced founder, coming off a 3-mth sabbatical, after closing a modest exist of my previous tech startup.

I stumbled onto SF model while building a thesis around a vertical software technology segment and I wondered if it is at all common for search funded companies to end up becoming an acquisition vehicle in adjacent tech sub-segments (if the deals & funding is attractive). I realize what I'm talking about may operationally sound like a Buyout fund, but i'm not sure if people have taken Search Fund route to accomplish this.

Thanks

Karthik Sridhar

Reply by an investor
from University of Miami in New York, NY, USA

Hi Karthik. The short answer is yes. You can buy a company through the search fund model and continue acquiring bolt-on acquisitions under that same company. Some searchers stumble upon the roll-up model after they acquire their first company and others set out to do roll-ups from the beginning. If you have an attractive industry, a synergy thesis that makes sense, and targets identified, you can definitely set out to do a roll-up from the start. Happy to chat more about this. Feel free to DM me!

Reply by a searcher
from Boston University in Cupertino, CA, USA

Thanks for the clarify Juan. I’ll send you a DM with my precise thoughts.

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