I previously was contemplating a rolloup strategy but most of my investors have pushed us to starting with one brand/target. This seems to align more closely with the search fund model. However, we are already quite close to submitting LOIs on 2-3 brands and have thus funded those "search costs" ourselves. How should I be thinking about economics (both our own equity as well as salaries and the search fund costs) if we already have identified assets and are much closer to finalizing a deal than a true searcher from scratch? Thank you!
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We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
If the latter, it sounds more like a programmatic acquisition strategy. You might benefit from bringing on a private equity fund to serve as a capital partner with deeper pockets - instead of a search fund that might not be able to double down as you raise incremental equity to acquire additional brands. (Eventually of course you can rely on debt alone to finance acquisitions to avoid equity dilution).
e.g. AJ Wasserstein who built ArchivesOne and brought Housatonic PE on as a partner.