Searchfunder members,

Search fund entrepreneurs should anticipate certain questions and have rehearsed answers

Case note authors: ^Searchfunder member‌ & ^Searchfunder member‌

Raising capital in the search fund ecosystem involves a well-choreographed dance between aspiring entrepreneurs and potential investors. Investors are selling search fund entrepreneurs on why they should be included in a cap table, and entrepreneurs are selling investors on why they deserve precious capital and time investments. The search fund investor market is a thick one, with hundreds of investors committed to the asset class. We estimate that these hundreds of investors have over $1 billion to invest in search funds and search fund acquisitions. On the entrepreneur side, there are approximately sixty new search funds raised annually in the U.S. and Canada, according to the 2022 Stanford Graduate School of Business Search Fund Study,3 and a further forty new search funds raised annually outside of the United States and Canada, according to the 2022 IESE report on international search funds.4 This number does not include other entrepreneurship through acquisition (ETA) forms such as self-funded searchers, search fund adjacent activity, or search fund accelerator activity. In short, a lot of search fund action is happening, and the community is proliferating.

Anecdotally, we know and acknowledge that, at least in North America, we are in a moment where top talent (i.e., the entrepreneurs) have all the power and can choose from scores of investors to build out their investor base. Gone are the days when entrepreneurs went on a roadshow, visited potential investors in person, and meekly sought their approval and capital. Now, investors tread to MBA campuses, eagerly pursuing aspiring entrepreneurs and attempting to differentiate themselves amongst their many peers to secure a place on oversubscribed cap tables. However, despite power firmly residing in the talent’s hands, investors and entrepreneurs still need to match.

For the full case note, go to

Questions Potential Search Fund Entrepreneurs and Potential Investors Might Ask Each Other