Over the past few months, I’ve observed a new profile of target company popping up with an increasing degree of frequency, particularly from prospective searchers seeking out new and creative ways to generate propriety deal flow. I refer to this emerging profile of company as the “VC orphan”. That is, a healthy and modestly growing company that has raised at least one round of institutional venture capital, has achieved product/market fit, but has failed to produce the triple-digit growth rates and exponential scalability potential that’s all but required for them to continue to command the time, attention, and capital of their VC-backers.

Might searchers also consider this very different company profile, in addition to that which has served as the foundation of the Search Fund investment vehicle over the past three decades? This week's blog post attempts to explore this question, presenting observations that both support and refute the thesis.

Venture Capital “Orphans”: Exploring an Emerging Search Fund Investment Thesis