Yesterday SIG published their study on self-funded search, and I interviewed partners
The report is intended as an answer to the Stanford Study on the traditional search fund side.
Some much-needed visibility into self-funded search — which is most searchers after all.
A few favorite findings:
53% of searchers reported net equity proceeds of over $1m.
Over half of searchers who actually acquired made over a million dollars by buying a business.*
More impressive, 24% reported net equity proceeds of $4m or more.
So a quarter of self-funded searchers who bought a business estimate the value of their equity in their businesses to be $4m or more.
AND, most respondents had acquired within the last 3 years...
Which is to say:
In most cases, that's $4m in 3 years or less!
Assuming the searcher's business grows and/or that the searcher's position continues to grow as debt is paid down, the $4m will only grow too.
A couple more:
* 68% contributed less than $200k of their own capital to fund the acquisition.
* 24% contributed less than $50k!
There is so much more data in this study, a lot of which we discuss in the interview. Enjoy:
* Assuming they sell; this net equity number was based on valuations at reasonable multiples.