Search Fund Road Show

October 13, 2020

by a searcher from University of Texas at Austin in Houston, TX, USA

I'm about to send out my PPM to search fund investors to raise search capital. I have a narrow industry focus which I really like and I think has the ability to provide really good returns to investors. I'm trying to prepare myself for the upcoming "road show" and wanted to poll for some guidance...

How long should I expect this process to be?
What kind of questions should I expect?
What are the the investors really trying to diligence in this first Round?
Any other guidance?

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Reply by a searcher
from Rice University in Houston, TX, USA

No, it is not that easy. Most of the known search fund investors will accept and review your PPM, but in no way does that mean they are going to commit to your search. I've replied on several posts about the early stages and capital raise of a traditional fund, but there are tons of new searchers entering this arena every semester that are coming out of the best schools in the world and from impressive career histories. It is COMPETITIVE. I would highly recommend scheduling a phone or Zoom call for your initial meeting with an investor or investment group, which is the likely outcome in the age of COVID. During the initial meeting, I would pose specific questions about their current position in search-round fund availability and how many searchers they are currently evaluating. Try to get as good an idea as possible on how much they like your PPM and your story before booking any travel. I wasted money traveling to meet with many investors in person that had a low likelihood of committing to my search.

Reply by a searcher
from Hult International Business School in Othello, WA 99344, USA

Thanks ^redacted‌, ^redacted‌, for the advice. I was just surprised I guess that they would even welcome PPM's from people they hadn't been introduced too, seems they would get flooded and not all of PPM's would be well targeted so that could be a little frustrating. I am self funded, but sometimes see deals beyond my reach that I am interested in. I then think, If I was working with investors, it wouldn't be beyond my reach, so have been considering the best way to find some not for the search, but in the actual purchase.

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