Reports and Notes

"Tiffany Clay Augustyn of Endurance Search Partners conducted a survey that asks former Management Consultants to share insights into their Search Fund experience"

Augustyne, Richard and Larry Dunn. 2016-12-22. The Due Diligence Phase for Search Funds - More than Meets the Eye...

"The NIP Investment Group outlines the due diligence process once an LOI has been signed by a searcher"

Dennis, Josh and Erick Laseca. 2016-11-07. "The Evolution of Entrepreneurship through Acquisition." University of Chicago Booth School of Business.

"The paper explores how growth and change will affect ETA going forward. It begins by reviewing the origins of the traditional model and the variations that have begun to emerge more recently. It outlines the common themes that support, or in some cases add, to existing data. Later, it analyzes the growth of ETA through different time periods, focusing on the primary drivers of success and incentives for different parties. Finally it concludes by sharing the perspective we gained after analyzing all this information."

Augustyn, Richard and Larry Dunn. 2016-08-16. "Improving Search Efficiency - Search Fund Guide to Internships.".

"NIP Investment Group describes best practices, tips and references for searchers who engage interns"

Johnson, Rob, Lenka Kolarova, Antonio Davila, and Peter Kelly. 2016-06. " International Search Funds - 2016 (IESE ST-415-E).".

" Report completed by IESE Business School on search funds that were formed outside the United States and Canada. Undertaken in partnership with Stanford Graduate School of Business. The study aims to shed light on the evolving characteristics of all known international search funds, including changes in the characteristics of search fund entrepreneurs. The study is drawn from a pool of 45 first-time search funds, the earliest of which was formed in 1992. The sample set is diverse, with international searchers in 14 countries on four continents."

de Longuemar, Artus and Travis Reese. 2014. "Marketing and Sales in Small to Medium-Sized, B2B Businesses acquired under the Search Model." Harvard Business School - Student Independent Project - Fall 2014.

"Interviews with recent searchers and operators of SME's. “Key Man” Risk is overstated, customers are more loyal to firm. Customer Retention Guideline: Learn, Listen and Act. Be cautious about Meeting with Customers too soon. Grow Profitability through Sales and Marketing Efforts - Pricing is quickest short term. Role of the CEO as chief salesperson. Challenge of hiring salesforce."

Donovan, Mike. 2014. "Search Funds – Effective Intermediary Outreach." Harvard Business School - Student Independent Project - Fall 2014.

"Survey results from 37 searchers about the effectiveness of Sell Side brokers, CPA's, Riverguides and other sources of prospects. Additional information on CRM systems utilized to track contacts and observations about other effective outreach tools."

Johnson, Rob. 2014. "Search Funds - What has made them work ." IESE Business School-University of Navarra, November, 2014.

"17 interviews with searchers to draw conclusions about successful searching. Utilizes the three legged stool analogy of Jockey, Trainer and Horse to describe the process."

Kessler, Ben. 2012. "Search Funds: Death and Afterlife." Stanford Graduate School of Business - Student Independent Project - Spring 2012.

"Interviews with 22 failed search businesses. Outlines 9 common themes ranging from low industry growth to conflicts with previous owners. 15 data points on salaries for searchers after their search business is closed shows only 33% ahead of their MBA class and over 50% behind their classmates. Closer examination of industry data shows that Manufacturing and Retail businesses fared the worst. Finally, "optimal" characteristics for a successful search are presented for the industry, business and searcher"

Sharpe, Jim, Howard Stevenson, and Michael Roberts. 2012. "Early Career LBOs Using the Search Fund Model." Harvard Business School; Revision Date: January 20, 2015.

"The funded search model is one alternative for individuals who, at some point in their career, want to run their own companies. This note looks at the funded search, as a means to entrepreneurship through acquisition and describes the path to buy and run a business using debt and equity as a means of financing the purchase. While applicable to an early career choice, many of the process steps are applicable to unfunded searches at later stages of a career. Examples of the process steps, a fund raising proposal, criteria for identifying prospects and a hypothetical deal structure are presented."

Nieboer, Ian, Mathieu Carenzo, and Antonio Davila. 2011. "The First 10 Questions for Would-be Searchers." IESE Business School-University of Navarra, September 2011.

"Answers to 10 common questions about search funds."

Thomson, Paul. 2011. "Paper: Search Fund Manifesto." Self Published, September, 2011.

"Observations and examples of Paul Thomson's search launched in June, 2009 and the successful acquisition of Yates Insurance in June, 2011."

Julia, Carlos, Borja Lomba, Jesus Moreno Sosa, and Jose Ojeda. 2010. "Feasibility of the Search Fund Model in Spain." Harvard Business School - Student Independent Project - Winter 2010.

"Specific observations of the search fund model as it applies to Spain covering the fund raise, search, financing and running of the business."

Ellis, Jim, Peter Kelly, and Lisa Sweeney. 2009. "Models of Entrepreneurial Acquisition." Stanford Graduate School of Business, Revised January 19, 2011.

"Mini cases on traditional search, self funded and sponsored searches. Also considerations around selecting a partner or searching solo."

Roberts, Michael J. and Ennis J. Walton. 1988. "Purchasing a Business: The Search Process ." Harvard Business School; Revision Date: January 31, 1989.

"Broad overview of search process, whether funded or self-funded. Covers self-assessment, buesiness screeening criteria, sourcing, resources needed to purchase a business, the deal process, the valuation process, negotiating with the seller, and adding value after closing and exit strategies."

Roberts, Michael. 1988. "Valuation Techniques." Harvard Business School, August 18,1988.

"A review of three major categories of evaluations ranging from Asset, Earnings to Cash Flow methods with a discussion of various options and impact of them during acquisition of a business."

"Search Fund reference website"

Posts – Most Recent

Posts – Contemplating a Search

Posts – Launching a Search

Posts – Conducting your Search

Posts – Being CEO/Owner

Random Quote

45-“Strategic partners” are very important to the business searchers.You want to rely on some trusted providers to support your business, you can’t do everything yourself!(See Blog Post-Strategic Partnerships)

42-Start early on legal documents, they often delay closings while under LOIBoth the searcher and the seller are plowing new ground and it takes a while to comprehend the meaning of all of the legal details .(See Blog Post-Getting to closing)

63 Searchers make promises they can meet to build trust with sellers. It is important to provide incremental opportunities to show that you can be counted on to deliver.(See Blog Post-Building Trust with Sellers)

34 Searchers who get access to employees before closing are more likely to close. Once the seller begins to confide in their employees about the sale of the business and introducing you as the “new owner”, they are more likely to proceed to finalize the transaction than to change their mind at the last minute.(See Blog Post-Getting to Close)

07-You are not a PE firm, don’t act like one!
Potential sellers resonate with your taking over their legacy, a PE firm is simply adding to their portfolio. Make sure your website looks personal and non-intimidating.

04-Fight Seller Fatigue in Due Diligence!
Sellers get worn out in this process. It is highly emotional for them, probably their first time at relinquishing their “baby” to someone else. During LOI stage, make it a practice to communicate with them, in person or by phone, every 2 days.

53-Holding monthly “all-hands” meetings indicates your transparency. Trust employees with what is going on with the business and they will trust you more .(See Blog Post-Communicating with Employees)

06-Use metrics to drive decisions
Track what is most important for your search – getting in front of prospective sellers to make offers to buy their business. Track the number prospects, IOI’s, LOI’s and set goals for yourself! If you measure it, you can improve it.

22-When in conflicts arise, remind professional advisors they work for you.
Inevitably, you will disagree with some advice you are getting. After checking multiple sources, do what feels right to you and move forward. You will have to “live” with your own choices, not the professionals!(See Blog Post-Professional Support)

18-Every day that goes by during Due Diligence raises the chance that you won’t close!
Time is of the essence when it comes to moving from a signed LOI to closing on your business. Seller fatigue sets in as the closing date gets extended and the seller constantly re-evaluates their motivation to sell. Only you can push the process along.(See Blog Post-Due Diligence)

44-Plan ahead, give thought to the small details of how you present yourself as the new owner. The first introduction to the employees of the business has a huge impact so you want every word to be rehearsed!(See Blog Post-Taking over the business)

50-Don’t expect immediate “loyalty”, the previous owner earned it, it takes time. You will need to earn the trust of your employees by your actions, not your words. (See Blog Post-Seller Tranisition)

35-Searcher CEO’s need to be prepared to walk away from volume orders if margins will decline. It takes a forward thinking CEO to seek out higher margin, value added opportunities to grow profits, not revenue.(See Blog Post-Wearing the sales hat)

09-Learn from others – read case histories
Over 40 case histories have been written about funded and self funded searchers in a variety of industries and historical settings. Each have great “lessons learned” and are worth the $10 cost to read them. Searchers are learners!

39-The business seller is “hiring” you to run their business. The owner trusts you enough to turnover the “legacy” of their business to you. (See Blog Post-Searcher Profile)

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