What are 3 things you would advise anyone looking to launch a searchfund?
April 10, 2020
by a searcher from Indiana University at Bloomington in New York, NY, USA
Learned about searchfunds during my MBA and am eager to launch one in near future, but would love to hear pieces of advice from others who took the plunge!
Happy searching!
from The University of Chicago in Chicago, IL, USA
1. Talk to 20-25+ searchers, including currently searching, currently operating, and exited. If possible, include searchers who failed to close an acquisition or who returned <1x invested capital. No matter how many articles or books you read, these conversations will give you a sense of what you are getting into and provide important tips for fundraising, searching, and operating.
2. Intern for a search fund to get exposure to researching industries, building target lists, and evaluating deals. This is especially important if you do not have experience running a deal process.
3. Do as much prep work as possible prior to launching your search. Time is the enemy, so it's important to get your sourcing infrastructure in place prior to starting the 24 month clock. If you are still in the MBA program, you can use this time to work on industry theses, network with brokers, test email automation providers, etc.
from Carnegie Mellon University in Chagrin Falls, OH, United States
I'd also advise interning for a searcher who is already operating their business. In my opinion, that's more important. You will search for 2-3 years but you'll be living in a small business for 5+.
Spend a lot of time evaluating which setup is right for you - self-funded, traditional, accelerator, "CEO in training" programs run by some PE firms, etc. They are all different and come with different trade-offs.