To Thesis or Not to Thesis: The Difference Between a Searcher and a Managing Partner

Thanks to everyone for the thought-provoking comments on my previous articles. Your observations—and the many DMs I’ve received—caused me to reflect on the periods of my professional journey where I was engaged in the highest and best use of my skills, abilities, and experience. Several of you asked about the specific methodology we use, specifically the first step: The Thesis Intensive. This article is a response to those inquiries, and addressing the shift required to move from “Searcher” to “Managing Partner." If you do not know what you are looking for, how will you find it? By definition, if you lack a specific thesis, you are a “Searcher”—a reactive participant in a market largely driven by brokers. With a thesis, you are the Managing Partner of an investment firm. The investors who produce far right-tail returns don't wander; they hunt with a narrow aperture. An investment thesis grounded in domain experience transforms a “Random Walk Search" into a “Mandate." Let’s dive a bit deeper into the day-to-day differences between a Searcher and a Managing Partner. 1. Search vs Mandate The Searcher: Operates as a "Price Taker." Does this scenario feel familiar? • subscribe to every business broker’s feed, • review 50 CIMs a week, • try to select a couple based largely on feeling/intuition, • try to drink from the fire hydrant to learn about the industry to prepare an LOI, and then, • compete in the process where their competitive advantage is the highest bid. The Managing Partner: Operates as a "Value Architect." The Managing Partner ignores the noise of the general market and the sales process. Their approach looks like: • Execute outreach to owners of specific businesses that fits their thesis. If a brokered deal crosses their desk, accept the outreach from the broker. • Rather than drink form the fire hydrant, they conduct valuable conversations with business owners because they have a detailed understanding of the drivers of the market, the value and leverage of each link in the value chain, and the key drivers of the business. • Based on their understanding of the target business and its challenges compared with the North Star Business in that link of the value chain, they develop an LOI based on the true value of the business. They aren't looking for a "deal"; they consider investment in specific assets that fits their mandate. 2. The First Interaction: You Never Get a Second Chance to Make a First Impression The first ten minutes of the initial conversation with a business owner or sell-side representative sets the irrevocable tone and direction of the deal. The Searcher: The Interrogated Interviewee. Because the searcher lacks a thesis, they are often "drenched from the fire hydrant"—scrambling to appear informed while the sell-side drives the conversation. The broker or owner interviews the Searcher to determine their credibility and likelihood to close. The Searcher presents generic questions and receives "canned" answers. The power dynamic is clear: the Searcher is asking for permission to buy. The Managing Partner: The Authority and Peer. The Managing Partner enters the conversation as a strategic peer. They lead with their thesis, the drivers of the market, and the specific opportunity they’ve identified. They frame the seller’s company as a platform to transform the industry and strengthen the founder's legacy.
 They often pivot the status of the meeting with a single statement: "Based on the industry benchmarks for [XYZ Sector], your current margin structure suggests a specific operational delta. Let's discuss how we bridge that." This signals deep domain expertise and shifts the seller from a defensive posture of delivering canned responses to a collaborative mindset of constructing the future of their legacy. 3. Diligence Logic: Data Gymnastics vs. Forensic Calibration The Searcher: The External Investigator. The Searcher, still trying to learn about the intimate details of the industry and companies in it, accepts one of the most dangerous risks: They do not know what they do not know. • If a sell-side advisor create a CIM, without intimate knowledge that would identify the inconsistencies, The Searcher must examine everything. • Trying to climb the learning curve, the Searcher asks the seller for a wide range of data. • The seller may feel overwhelmed as their systems may not generate the reports with the click of a button. The owner must run their business and take on the second job of responding to the Searcher(s). Essentially, The Searcher is trying to find the "truth" in a vacuum, relying on the seller’s ability to present data they may not have, often don't understand themselves, and do not prioritize the The Searcher base on the first impression. The Managing Partner: The Forensic Engine. The Managing Partner doesn't expect clean reports; nor do they need them. They don't wait for a P&L; they already built it during our Thesis Intensive. Then The Lab comes in. At Acorn, The Lab is our forensic tools and methodologies that performs the "Data Gymnastics.” Based on our thesis, The Lab knows exactly which variables to calibrate. We don't ask the seller to explain their margins; we show them how and why their margins deviate from the "North Star Business." This allows the Managing Partner to create value for the seller while validating the reality behind the scenes in a collaborative fashion. The Capital Conversation: Asking vs. Deploying The Searcher: The Perpetual Pitcher. For The Searcher, every deal is a new "Cold Pitch." They must educate their investors and lenders on the industry, the seller’s messy books, and their own credibility—all while trying to keep the deal alive. They are constantly "asking" for capital to back a business that they discovered while they are still trying to understand it. The Searcher is asking the investor to accept significant risk. The Managing Partner: The Authorized Investor. The Managing Partner isn't pitching; they are executing. Their thesis was pre-vetted and stress-tested inside The Factory long before a specific target was identified. And, while building the thesis, we tested it with our syndicate of investors. 
 The Factory is the institutional engine that constructs and validates the thesis—it is the environment where Institutional Alpha is engineered. This is a laboratory of high-alpha returns where sector logic is pressure-tested and mandate variables are calibrated long before a specific target is ever identified. During the Thesis Intensive, as part of the validation, we select potential investors based on the value that they can contribute to the acquired businesses. Then, we brainstorm the thesis with the selected potential investors. When the Managing Partner goes to market, the capital is already “warm." Conclusion: The Cost of the Random Walk The "Random Walk Search" is a war of attrition. It is estimated that nearly 70% of searchers never close a deal. This failure is rarely due to a lack of talent or work ethic; it is a lack of infrastructure. The solitary searcher is crushed by the cognitive load of being an industry expert, a forensic accountant, a lead negotiator, and a capital fundraiser—all at once, for businesses they found only yesterday. This leads to "Deal Fatigue" and, eventually, a total loss of momentum. A thesis is more than a choice; it is the foundation of the machinery—The Lab and The Factory—that allows a Managing Partner to survive the journey and win the asset. It transforms the search from a "Random Walk" of luck into a calibrated "Mandate" of institutional precision. In your first interactions with sellers, how do you feel you are being perceived? Are you seen as a strategic peer ready to steward the founder's legacy, or are you still searching for the key that moves the conversation past the general inquiry phase?