Searching as a Veteran

Searching as a Veteran

Military veterans have recognized that search is one of the ways they can utilize their leadership skills and fulfill their dreams to be an entrepreneur. The Post-911 GI Bill, plus the Yellow Ribbon Program, significantly reduces the cost of graduate school for veterans and reduces any potential school debt. Additionally, the SBA reports that veteran-owned firms represented 9% percent of all U.S. businesses, which indicates a healthy and receptive audience of sellers.

At Harvard Business School, veterans represent about 5% of the graduating class but a hefty 16% of the searchers in the last 5 years but none in the previous 5 years; a significant trend. A survey of two dozen military veterans found that most were traditionally or sole-source funded. Very few embarked on their search with a partner, compared with 40% HBS partner-searches overall in the past 5 years. As with searchers who are women, having “pioneer role models” to reference and provide guidance will help potential military veteran searchers make a more informed choice for what is right for them.

Why search?

Judd Lorson (USN Submarines) at Klaxon reflects, “I have always wanted to own and operate my own business. Before business school I thought that meant starting something from scratch or buying a franchise – the term ‘search’ put a name to my aspirations. The timing felt right to me straight after business school, since it only felt like the decision would get harder the longer I waited (family, kids, life, etc.) and I felt I can always go pick up a corporate job after two years if things don’t work out. I was confident in my ability to lead a company but was concerned about identifying and moving forward with the wrong opportunity during the search process so I chose to join the Search Fund Accelerator to help minimize that risk.” See Blog Post – Is search right for you.

Jason Jones (USMC), founder of Oakbourne, was working in a large organization and relates, “One particular moment made me realize that I needed to make a change sooner rather than later: I was working 120+ hours per week, so my boss decided to give me 3 junior associates to help me out. At one point, my boss referred to those 3 individuals as ’an army of people‘. She was dead serious. A few years prior, I was leading 30-50 Marines and now I had an ’army‘ of 3. It was time to move on to my real passion in leadership and entrepreneurship with a search! I realized that life doesn’t wait around for all the stars to align.”

Beyond this entrepreneurial desire and independence, Patrick Dunagan (USMC) of North Range found that “I think search can be a path toward substantive professional achievement that may be more conducive to a more balanced work-life while raising a family.” Another searcher reported, “It seemed it was a great way to gain experience with other people’s money which limited my immediate monetary risk but did come with career, time and emotional risk. I realized that pretty much any big corporate job has about a 10% maximum tie-in to small business. I could learn more faster just by jumping in. I realized it’s not all about money — although money certainly makes things less hard.” Brian (USMA) points out, “I think that search is more than a career choice – it’s a life choice. I found that by being transparent about the search process and my commitment to it, I was able to set expectations early on and get everyone around me on-board with the vision.”

Sometimes opportunity just meets preparation, as one searcher found, “I was considering a solo search when an old friend, a second-time searche,r reached out to suggest that we search together; partnering with him made the path a lot more obvious to me. I was leaning towards a search even before he reached out, in large part because I had such a bad experience on the “traditional” path during my summer internship. I interned at an investment bank in New York and hated every minute of it (I was also terrible at the job, just not much of a numbers person). I felt that I had ample leadership experience from my military service and didn’t want to be an individual contributor at a professional services firm.” Another veteran pointed out, “I wanted to return to the small unit leadership I enjoyed in the Army to have a greater impact on my employees than in a traditional MBA job.”

Key decisions for searchers

Getting support from extended family for what search entails may be easier for a military family which has gone through extended periods away from home, on deployment or extended voyages. See blog post, Your Significant Other. A naval helicopter pilot launched a brief search between jobs and found that “Family is a factor, especially if you are starting one soon. I communicated early and often what I was doing and although initially supportive, ultimately my significant other was not a huge fan of the search.”

Thoughtful consideration of where you end up living is one of the important choices that searchers make, either where to search from, or the reality of where a national geographic search may lead you. Daniel Reese, (USNA) submarine officer, advises, “While moving to small town Kansas or wherever may not seem like a huge deal now, I have definitely missed the action of a city. This is especially true because not one person from my graduating class moved to the area where I now work. Be sure you understand the downside of moving to a place where none of your friends care to visit.”

What skill sets veterans bring to search

While it is easy to focus on the getting the “deal done” in search, the ultimate goal is to become a CEO/Owner and being able to lead the acquired business beyond where it has been historically under prior ownership. The transactional skills can be learned through practice during the search. The more important phase comes after the purchase and veterans are particularly well prepared for this, as one veteran pointed out “Working in a small business emphasizes the strengths the military embodies, primarily building and working in teams. When best executed, small businesses are cohesive teams.”

There is plenty of uncertainty in both searching for a business and running the operation. One USMA officer pointed out, “The military develops small unit leaders who can operate in ambiguous environments. There is rarely a solution that is readily apparent, yet they have to figure out the best way forward given the resources available. This ambiguity isn’t discomforting, rather a norm. Mitigating ambiguity often involves seeking help and advice from others with more experience to cut down on the learning curve.”

Many searchers worry that they don’t have the business background or financial skills to succeed early in their search. Jason Jones (USMC) felt well prepared, observing, “As a young Marine, I was thrust into at least 2 different positions that were above my pay grade and experience level. I thrived, and they turned out to be formative experiences. I was confident that I would be able to do the same thing as a searcher and eventual CEO as well, as long as I stayed adaptable, curious-minded and humble – Semper Gumby!” He continued, “Another advantage is during the search phase. About 50% of the email responses from business owners reference my status as a veteran, and 99% of those responses are supportive in nature. About 10% of business owners tell me that the only or primary reason they responded is because of my service. The search phase is essentially a fishing expedition, and being a veteran increases the number of fish that you hook.”

Patrick Dunagan (USMC) also commented, “The veteran narrative helps establish trust for many business owners. It’s usually their first time selling a business and, as I’ve been told by more than one seller already, they’re very afraid of being screwed by some slick Wall-Streeter who’s never done real work!” Brian (USMA) says, “As a veteran, where you move every few years and meet people from all over the country (and even the world), the thought of picking up everything and moving to a different state to pursue a business is less scary than for people who haven’t had those experiences.”

Many veterans cited their ability to work with people from a variety of backgrounds as a significant advantage when they became CEO. One veteran pointed out, “Searchers who are veterans have the ability to work, manage, and connect with ‘normal’ blue collar employees wide variety of backgrounds, personality types, and intelligence/skill levels and are not afraid to dig in to earn credibility through doing some of the work themselves. Motivating these different types of people requires different skill set. Often searchers with gold-plated resumes don’t realize what they don’t know about the bulk of America – particularly rural communities.”

Choosing when to search

Decision points in a career for a veteran are not much different than for civilians. Those who pursue their MBA face the choice of joining a large organization, perhaps one they worked at during a summer internship, or from the myriad of recruiting choices that are presented on campus. Within 3-5 years generally comes another decision point when reflecting on future opportunities, desire to change industries or changes in the company they joined. Additional opportunities to search may happen on further occasions over the rest of a career. See Blog Post – When to Search.

It is often difficult to “move up” into a larger organization having spent time in a SME. Instead, it is much easier to “move down” to a smaller-sized business on the EtA path. Jon Sheedy, a F-18 Fighter Pilot, chose to join the multinational Lily and Company after graduation and advises, “Question hard what you will be missing out on if you choose not to join a large company. That experience and exposure is something that is nearly impossible to get in an EtA type business. With your MBA in hand it is the best/easiest time to get into a large organization and see what good looks like. I believe that I can start a search whenever I get tired of working for a large company!”

Others report that waiting a short while before their search mitigated some career risk and gave them time to reduce their debt load, gain some additional “large company” experience and square away their personal life. Patrick Dunagan (USMC), left Google to search and explained “By waiting 2.5 years I was able to put professional, non-military experience on my resume that I felt de-risked my career should the search fail, and save enough money to responsibly pursue a self-funded search. Also, when I graduated I was seriously dating my future wife. I wanted to give the relationship every chance to succeed.” Another says, “A part time search would be fine as a running head start for a full-time search but was not going to be very effective if it continued that for a long time. The full-time search is necessary to truly find something worthwhile to pursue; do not count on getting lucky!”

The stability and lack of resource constraints in an SME drove Adam Voci (USAF) in a different direction “I found a job where I could build tangible things, lead teams, have autonomy, with better funding than a small business. I also found considerable purpose in my work given that I do real estate development for several military bases around the country.” With a different perspective, Aaron Habriga left the USMC to join a Private Equity firm before B-School and commented on his career choice, “I ultimately decided to take the path I knew (going back to PE) vs. what I viewed as the riskier prospect of a search. I was also deep in debt after my MBA and the compensation with PE allowed me to dig out much more quickly. I fully understood the decreased compensation for 1-2 years and the risk of not getting a deal done on killing your search.”

Daniel Reese, (USNA) submarine officer, pursued a different path to becoming a CEO, saying “I took an offer with strong equity incentive from a small investment firm doing operations for a portfolio company with a CEO role for one of their acquisitions after two years. To me, this offered most of the same characteristics of a search without having to endure the search period, and offered a similar equity upside.”

With the advent of more and more sponsor-funded programs, additional options to become a CEO have become accessible. Matt Beaudette, (USNA) submarine officer, did not search directly after graduation, and instead joined a PE firms’ CEO in Training program and relates, “I saw Alpine’s program as an extra year of training, side-by-side with an experienced CEO as more valuable than the experience of raising capital and sourcing deals. I viewed the program as a risk mitigated way to achieve similar professional and financial goals. It has given me exposure and mentorship in the SaaS space, with no prior software background, and a pathway to leadership of a much larger company than traditional search, with perhaps more flexibility than I would as a searcher.”

Advice from Veterans

For those concerned about “failure to find”, a veteran searcher/CEO says “Vets should have no trouble finding a job if the search doesn’t pan out. But if the fear of failure and the concern about opportunity cost are real, it may be that the prospective searcher doesn’t really want it badly enough. Searching is not always fun. I also don’t think that your lack of private sector experience should keep you from the search. Most of the biggest challenges I’ve faced as a search operator have been related to people, and military vets have lots of experience dealing with a range people-problems and no fancy excel modeling skills required.”

One searcher found, “Speed Matters – I got beaten to the punch a few times on submitting an LOI for businesses because I was slow to produce the document due to my early inexperience. However, several of these businesses came back to me months later because the process fell apart with the other buyers.” Judd Lorson says, “Reaching out to other veterans to find out how their experience translated gave me the confidence and encouragement to go down the search path. But, don’t stop there, find other searchers that are non-veterans who have searched, acquired, failed and exited to solicit their lessons learned.”

Another officer (USNA/USMC) advises, “Don’t do it just to chase a lottery ticket. Recognize the higher risks in the lower middle market that differentiates search from other larger businesses, being “key man risk” and operational leverage (SG&A as % of gross profit), you will live or die by these, and may do so at the drop of a hat. Don’t provide a personal guarantee on the debt unless you are rewarded with equity near 60%+ for it. The idea that gobs of low-hanging fruit are just lying around for clever searchers to pick up is 90% false; search takes a lot of work. Beware the compounding IRR, seriously! Don’t be New York City or an MBA; be Wichita Falls!” Also, Brian (USMA) observes, “Even though search is a commitment, it doesn’t mean the rest of your life is on hold. I met my fiancé when I started the search process and we got engaged during the search.”

There are lots ways to stay connected to search not matter what path you take. John Sheedy found “there is a strong pre-established network of veteran searchers. I still stay connected to the even though I am not searching. In fact, I invested my signing bonus in a veteran classmate’s acquisition.” Joining and getting their regular updates is a way to plug into changes in the space. Offering to be an advisor or board member for a searcher my also keep you engaged.

Finally, one veteran observes, “Don’t stress about the decision – search will always be there along the path of your career, but spend time shadowing a search CEO to see if the role is what you want. Also, there’s no right answer with funded/unfunded, partnered/not partnered or geographic – think about what you’d like your life to look like in 10 years, then back into a career/search structure that will bring you to that point.”


One of the most significant characteristics for a successful searcher/CEO is resourcefulness, a trait that veterans have developed and honed during their time in service. Having worn the “mantle of responsibility” coupled with a variety of leadership skills, Searcher/CEO’s with this background are successful in acquiring and operating typical “search businesses”. Serving their country gives them a significant advantage as they return to civilian life and consider Entrepreneurship through Acquisition.

Search on!

Feel free to share some of your own best practices or experiences in dealing with these issues in the blog comments. I encourage comments and dialog, allowing all to learn from both my views and the views of others – a virtuous learning cycle. Jump right in! I frequently update individual blog posts, add to the Reference section and Search tips, so visit the website regularly.

Leave a Comment

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)

Subscribe to Jim's Blog via Email

Enter your email to receive notifications by email.