Searchfunder Analysis: Acquisitions By Graduate Business School

SEARCHFUNDER ANALYSIS: ACQUISITIONS BY GRADUATE BUSINESS SCHOOL

One of our community members asked about search fund acquisitions by graduate school. Given that IESE, Stanford, Kellogg, and Harvard business schools have held conferences on entrepreneurship through acquisition in recent months, we thought we'd take a gander at our crowdsourced data* to see what the answers might be.  

Harvard beats Stanford?  We've identified over 350 schools at both the undergraduate and graduate school levels who can claim at least 1 acquiror as an alum.  The above chart identifies the Top 10 graduate business schools by number of acquisitions. That means if you attended Yale undergrad and then attended Harvard Business school, HBS is listed on the above chart.  Given that the search fund concept originated with Professor ^[redacted]‌ at Stanford Graduate School of Business, we were surprised that Harvard leads in total number of successful search fund acquirors.  If your school is under-represented on these charts, feel free to contact ^[redacted]‌ to update the information.

Is 2018 the right cut-off date for this report?   You may wonder why we're not waiting until January to do this report to include 2019 acquisitions. First, there can be a substantial lag between when an acquisition occurs and when we're informed of it.  Deals may be confidential due to employee and customer sensitivities.  Also, new CEOs are fully absorbed in learning their new businesses and building relationships with their subordinates.  For these reasons, we expect that the number of acquisitions may rise for 2018, and, commensurately, we've decided to allow a lag before we report numbers for 2019. 
Global expansion.   The chart immediately below shows the growth of search fund acquisitions since the 80s while the chart far below demonstrates the global expansion of search funds.   In 2009, only 2 US schools from the total top 10 list of acquirors are represented.  In 2018, there were acquirors from 9 of the top 10 graduate business schools -- including London Business School and INSEAD in Paris, France.   Notably, IESE in Barcelona, Spain and Ivey Business School of Canada == which did not quite make the Top 10 List --  have had acquirors in recent years.  In light of the strong interest in search funds globally and the need for business succession globally, we expect that our list of business schools will have an increasing global representation in coming years. 

* Notes on the charts. The charts covers crowdsourced acquisitions for all types of search funds through 2018 as identified on Searchfunder.com on December 11, [redacted]We did not adjust for partnered searches.  Thus, if 2 or more searchers purchased a company, their business school receives one credit. for each acquiror.  This report has been updated to correct a compilation error. 
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41 likes 570 views 30 comments

Aalto University - School of Business Massachusetts Institute of Technology - 12/12/2019

interesting analysis + insights on global expansion of the ETA search model. Thanks for sharing Karen!

like reply | 1 like

searcher University of California, Santa Barbara - 12/12/2019

Thanks as always for your posts Karen!

admin Stanford University - Graduate School of Business Massachusetts Institute of Technology Harvard University - 12/13/2019

Thanks, ^[redacted]‌ and ^[redacted]‌. I've updated the charts due to a compilation error. The key points are much the same, slightly different details. And, I included a new chart as well.

like reply | 0 likes

searcher Hamilton College Ludwig-Maximilians-Universität München Northwestern University - Kellogg School of Management - 12/15/2019

This is great data! Thanks.

IESE Business School London Business School Rensselaer Polytechnic Institute - 12/15/2019

Strange that IESE doesn't show up in any of the statistics, yet I personally know 4 people from class of[redacted]alone

like reply | 2 likes

admin Stanford University - Graduate School of Business Massachusetts Institute of Technology Harvard University - 12/15/2019

Hi,^[redacted]‌ - We're having a conversation in the IESE school group about this same question. You'll find the group on the left side of the main menu under discover groups. If you know of acquisitions that we have not been told about it, I would be delighted to update our research. ~ Karen

searcher IESE Business School University of Manchester Ecole des Hautes Etudes Industrielles de Lille - 12/18/2019

Hi Richard, to clarify on this studies and building upon Karen's comment, the scope of this graph is limited to:
- Search Fund which outcome is the acquisition of at least 1 business (thus, Search Fund who either did not acquire yet or are inactive because they stopped searching are excluded)
- From 1984 to 2018 included (thus, 2019 is excluded)
- The 10 first Business School of this list
Since "only" 8 Search Funds with IESE Alumni as Principals correspond to this scope, as a result IESE is not on the graph.
That being said with the current cohort of IESE Searchers we should be able to appear on this graph next time ! Keep on searching and adding Searchers and we'll get there.

IESE Business School London Business School Rensselaer Polytechnic Institute - 12/19/2019

Understood, I just found it hard to believe that LBS/insead/Ross had more based on personal knowledge from the classes of[redacted]

Meaning my gut tells me it's more than 8 that match that criteria

admin Stanford University - Graduate School of Business Massachusetts Institute of Technology Harvard University - 12/21/2019

Happy to have a conversation, ^[redacted]‌, with you - if you'd like more detail to check against your gut. The more info we have the better the results will be.

professional Temple University Fordham University - 12/16/2019

Great post [redacted]!!! Very informative. Do you know the average cost of acquisition?

admin Stanford University - Graduate School of Business Massachusetts Institute of Technology Harvard University - 12/17/2019

Glad you like the post, ^[redacted]‌. I'd check out the Stanford Primer for that info. I recall the number $250 to $300K from older reports. Self-funded searchers who usually do a geographically focused search would be lower. You can find the primer on the left side of the main menu under intro to searchfunds.

searcher Harvard University - Harvard Business School - 12/17/2019

Great information Karen. I would be curious to see a chart showing breakdown of acquisitions by country over time if you have that information available.

What a great idea, ^[redacted]‌! I wouldn't be able to provide data on this right away but will put answering this question as an item for our next report.

searcher Harvard University - Harvard Business School University of Witwatersrand University of KwaZulu-Natal - 12/18/2019

For perspective, the HBS class is about twice the size of the class at Stanford GSB.

searcher The University of Chicago - Booth School of Business - 12/18/2019

Hi Karen,
Do you have any information on diversity? I’d also be curious in diversity by search fund model.

Hi, ^[redacted]‌ - We have not (yet) captured the diversity in the search funds -- although our impression is that it is very slowly trending toward increasing.

investor - 12/21/2019

Hi Karen, do these data include self-funded acquisitions?

Hi, ^[redacted]‌ - The data includes traditional, incubator, and self-funded acquisitions.

investor - 12/31/2019

This is interesting. I would be curious to hear if anyone has hypotheses on why this is the case... Are there special courses on Search Funds in HBS, or is there some kind of community/clubs formed there?

Stockholm School of Economics University of Virginia - 12/31/2019

Interesting post for sure.

lender Georgetown University - The McDonough School of Business - 01/06/2020

Thanks for sharing this data.

INSEAD ESSEC Business School Lebanese American University - 01/07/2020

Interesting post - thanks for sharing.

professional University of Missouri - Columbia University of Detroit Mercy - 01/08/2020

Will be interesting to see if more top-tier business schools globally become active as acquisition entrepreneurship continues to draw more visibility.

searcher University of Cincinnati - Carl H. Lindner College of Business Drexel University - 01/10/2020

the gap is crazy! But where's my school at?

Northwestern University - Kellogg School of Management University of Central Florida - 02/12/2020

Very insightful! I did have a question. I was excited to see Kellogg as 3th with around 38 acquirers but noticed we are 5th in # of acquisitions with 24 acquisitions. Is this suggesting a lot of partnered searches?

searcher Yale University - School of Management - 02/13/2020

Data is beautiful, thank you for a great information!

- 04/16/2020

Curious - would you have total dollar amount by uni as opposed to number launched?

Also - as another commenter mentioned, the funds as a % of class size is much higher for Stanford

investor Stanford University - Graduate School of Business Southern Methodist University - Edwin L. Cox School of Business - 05/20/2020

Late to seeing this, but thought it was interesting! I would be curious if there's a breakdown of self-funded v. more "traditional" Search acquisitions? That HBS # is surprising and I would guess it encompasses quite a few self-funded searches...

The GSB's "2018 Search Fund Study: Selected Observations" research actually lists the "record" number of "search fund entrepreneur" acquisitions at *17* companies in[redacted]The chart above shows HBS alone had 18 out of 53 acquisitions. So the definition of ETA / Search-acquired business is much broader here through Searchfunder, as we know, than those who "raise a Search" and acquire a business with a broad set of investors / advisors. The number of deals getting done by folks out of HBS is impressive, but I'm curious how many of those would actually look like a "Search fund" as I might more narrowly define it versus the other forms of entrepreneurship through acquisition.

^[redacted]‌ - thanks for compiling this info! Any breakdown of Search type -- "traditional" v. "self-funded" v. "single-investor / captive" Search models? Hope all are well - safe and healthy!

University of Pennsylvania - The Wharton School Brigham Young University - 05/20/2020

It helps to know that GSB class size is roughly 1/3 the size of HBS's. So GSB would have to have 3x higher % of searchers in its classes to keep up with HBS's absolute number of searchers. Interesting info. Certainly a lot of great searches from lots of different schools!

SEARCHFUNDER ANALYSIS: ACQUISITIONS BY GRADUATE BUSINESS SCHOOL

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