Purchasing units in your own search fund

searcher profile

March 02, 2021

by a searcher in New York, NY, USA

Has anyone come across any helpful materials that weigh the pros / cons / considerations to purchasing search units in your own search fund vs. self-funding vs. independent sponsor route?

Is it fairly common for searchers to purchase search units? Curious about the community's views on this question.

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commentor profile
Reply by a searcher
from Harvard University in Fort Wayne, IN, USA
I also purchased a unit in my fund. I liked it for three reasons, 1. It gave me real skin in the game. That aligned me even more with my investors and showed them how committed I am. 2. I wanted exposure to the investor side of the experience. 3. These deals have great returns!

But just so you know, almost every investor told me I didn’t have to do it. One even thought it was not a smart move because of “diversification,” but most liked it. Just make sure you can fund both the searching investment and the deal investment (otherwise you’re just giving yourself more work in an already busy time.
commentor profile
Reply by a searcher
from Harvard University in Mexico City, CDMX, Mexico
Hi Matthew, on our case, we did weight in the options highlighed above. We are 2 searchers and one of us did buy one unit. The investors really liked that we put our money behind the deal. I would highly recommend you purchasing a unit if you decide to go the traditional route.
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