TYPICAL PURCHASE MULTIPLES IN SEARCH FUNDS

I know it all depends on the specific industry and deal at hand, but I'm curious to get this group's view on average/median purchase multiples for searchers.


I started off reading the HBR guide to buying a small business and they are pretty strong on the 3x-5x EBITDA multiple range, with an average of ~4x for deals completed by searchers.

https://hbr.org/product/hbr-guide-to-buying-a-small-business/14156E-KND-ENG


I then read the Stanford 2018 Search Fund study (which appears to be more rooted in data, or at least they present the data) and they show a median multiple that hovers around[redacted]0x over the years.

https://www.gsb.stanford.edu/gsb-cmis/gsb-cmis-download-auth[redacted]

Is this just a difference in the self-funded model versus the traditional search fund model versus where the former is targeting smaller businesses and therefore smaller multiples? Or something else that I'm missing?



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