Congratulations! You've decided to raise a Search Fund and become an entrepreneur.

What’s next? Raising your fund. It’s time to develop a private placement memorandum (PPM), which will include a handful of important items, such as:

  • Search strategy (industry or opportunistic)
  • Industry and company screening criteria
  • Your resume, background, and why you want to be a Search Fund entrepreneur
  • Fund size, unit size, and general economic terms
  • Investors you want as long-term partners

Raising a Search Fund: What do we think?

The beauty of entrepreneurship is that there is no specific blueprint for success. However, several key ingredients are prevalent in nearly every successful Search Fund:

  • Industry-driven searches yield quality companies at reasonable prices
  • The size, growth, and quality of the industry you buy into matters…a lot
  • A history of profits and growth is the best predictor of the future
  • Contractual recurring revenue is critical
  • EBITDA of at least $2 million gives you the cash and scale needed to grow faster
  • Simple operations allows you to learn quickly and think ahead
  • High cash flow generation (i.e., low maintenance capex and high margins) is great