Searching With Interns

Searching With Interns

Your search process has to be as efficient and effective as possible to achieve the result of owning a business in two years or less. Interns can be used to scale up many of your processes and allow you to focus on dialog with high quality prospects, negotiating IOI’s and working toward getting to closing an LOI. They provide a boost in the quantity, quality and frequency of your outreach.

Hiring, managing, motivating and leading interns gives you an opportunity to practice what will be one of the more important themes in running a business: managing the human capital in the organization. Dealing with people quitting, poor performance, “no shows”, disruptive behavior and low commitment levels will improve your own proficiency. What better way to get started developing those skills than during your search!

Much of your search process is routine and repetitive and focused on driving up the numbers at the top of the prospecting funnel to yield business owners who are willing to talk about selling their business to you. You will need to broaden your prospecting processes, and learn to delegate these activities to a pool of interns who can greatly increase your own efficiency, even at the cost of spending some time coordinating and directing them. It will be beneficial for both you and the interns and provide you a great sense of accomplishment.

Progressing over time

Over the years, there has been an evolution in utilization of unpaid interns for search. The funded search model has never encouraged hiring additional paid “staff” beyond the searcher, only the searcher draws a salary. During the last decade, more and more college-age students are looking for practical work experience to bolster their resumes, learn about business or engage with an entrepreneurial endeavor.

Helping a searcher 20-40 hours a week, in sometimes challenging conditions, without pay, can be a sensational assignment for today’s intern. More employers, colleges and graduate schools are looking for candidates with broader exposure and experiences for their programs. Being engaged in a “search start-up” is a great alternative to flipping burgers or processing insurance claims, particularly for those students aspiring to break into the finance and private equity world.

Many searchers are initially reluctant to consider bringing on help. They worry about the risk of “not doing it themselves” or in many instances are so unsure about their own processes and convinced that they will not have enough to keep everyone busy. “Letting go” seems very intimidating when starting down the uncharted search path. As your prospecting becomes more effective, you will find yourself too busy to do everything. Give yourself no longer than 3 months before you have a fully staffed group of interns.

During my own search, I wanted full control over all elements of the process, and I never considered bringing on any staff; paid or unpaid; in retrospect a near fatal mistake. Others have simply never managed people before and shy away from taking on this added challenge even though they will be faced with it when they close on their business.

Today searchers are effectively utilizing interns to improve search quality and shorten search time. Marc Cussenot, a self-funded searcher/CEO of Precision Concrete Cutting, says that as single searcher he was able to handle as many as 8 interns and Adam Barker and Ben Murray of New Forest have had as many as 16 at one time! The average seems to be 4-6 interns per searcher.

Where to find interns

Developing and refining a “job posting” that is inspirational and realistically outlines the position is critical. While your website may downplay your search firm’s similarity to Private Equity and avoids looking like a start-up, your internship posting should do the exact opposite – emphasize a “PE-like startup experience” and the added benefit of direct exposure with a founder. Be transparent about it being unpaid, but emphasize the benefits of active engagement, learning opportunities and recommendation letters. Deliver on the promises you make and you will find it easier to attract future talent; applicants have been known to check out Glassdoor for references.

Targeting 20-40 hours/week during the school year and 40 during the summer will set a high level of workload expectations; this is not a fill in job. Make an effort to start a cohort “associates” all at one time; it will make training easier and the group will bond better. Generally a 10-12 week duration will get them through the typical “trough” at 8 weeks with an end point in sight.

A few searchers have been successful recruiting “full-time” interns for a specific period which results in a higher level of commitment, engagement and credibility for their resumes. Each may have a different “story” of why they are available and a little more difficult to find, but payoff in consistency and continuity to the intern staff. Each intern may commit only to a minimum of 3 months, but their dedication and lack of distraction from other activities makes this approach very effective.

Posting on Craigslist has been effective for many searchers. If there is a local university or community college close by, they are often willing to post opportunities at no cost. Some schools will even link a course/professor with the posting to allow the activity to earn the student credit. It is sometimes difficult to attract MBA’s who are put off by the clerical and routine work that has to be done, instead wanting engagement with tasks like modeling and industry/market investigation. Searchers have found great candidates from less distinguished institutions.

Transparency about the expectations and work activity should yield interns that want to work hard, learn new skills and be part of a “team” that is supporting a new venture. Often, candidates come from word of mouth contacts in their classes, fraternity/sorority or friends when they discover what a great experience it has been for them.

Once you are up and running, you can challenge the interns to replace themselves. Many searchers have designated one particularly strong intern to stay on and coordinate and lead the intern recruiting and management process. New Forest have three interns who have stayed on for over 6 months and each manage their own team of interns that they have hired and trained.

Remote control or local control

From the middle of Iowa, Andrew Mondi at Lyndhurst Capital successfully recruited 4 interns 40-50 miles away in larger cities and manages them remotely. Weekly Friday afternoon Skype meetings result in review sessions and Sunday emails from the interns outline their goals and plans for the week. He has also developed a “learning contract” that keeps them focused on the “two sided” arrangement that both benefit from. Coordinating his travel schedule allows him to see them all at least once a week. This “virtual” team approach has more and more precedence in a lot of industries, no reason it can’t be used effectively in search.

Jake Nicholson now at the Search Fund Accelerator effectively managed a series of interns at Danville Capital from around the Globe with weekly video chat sessions. He discovered that weekly reviews worked better than bi-weekly sessions at keeping interns on task. He augmented these higher quality interns with local resources.

Others have found that the “team” works best together from the same space. It does not have to be a large space, not everyone has to have a desk. Couches, lounge chairs and even the floor work just fine. Shared work-space is a much more familiar environment for many of the interns. Stand-up Monday morning “huddles”, published dashboards with metrics, daily progress and end of the week celebrations all contribute to getting beyond the boredom of licking and stamping envelopes, sending emails and digging deep to improve the quality of prospects.

This is not dissimilar from engaging Hourly NerdAmazon Mechanical Turk or Upwork to do prospecting activity or even a deep dive in due diligence on company, customer or industry background at very little cost.

Direction and motivation

Jon Byrd of Lakeside Partners reflects that to be successful you must “invest the time up front to train your interns”. Not all will have the same capabilities. Spread the assignments around and task them to teach each other, instead of having you do it. Establishing, tracking and reviewing weekly goals for each allows for a good sense of autonomy and at the same time provides verification with regular audits of their activity.

Providing learning opportunities in the form of “classroom” discussions taken from the variety of search teaching case histories to keep interest levels high. Developing or just working on a financial model gives great experience. Ahmed Makani at Arzoo regularly assigns an intern to present a brokered CIM for discussion with the entire group for debate about valuation, industry attractiveness, deal structure and seller profile. It is not uncommon for a senior intern to be preparing the IOI on a brokered deal.

Engaging interns in sessions reviewing improvements and changes to your own search process while they are on-board and during exit interviews is a great way to solicit feedback and allow them to see their direct contribution in the modifications. Allowing them to “listen in” on business owner or investor calls lets them hear both sides of the conversation and can be a special learning opportunity.

While it may seem tempting to provide some kind of incentives to interns to “align” them with your goals, searchers who have tried “success fees” for a completed deal have discovered the opposite effect. Providing a salary for “hardship” cases also yielded morale issues with the other unpaid interns. Pizza from time to time along with the “entrepreneurial experience” sprinkled with gratitude seems to work best.

Coaching them by reviewing their resumes and LinkedIn profiles can beneficial to getting real-world experience from the founders. Even sharing life and career lessons can be worthwhile for the interns to see some good and bad modeling choices.

When it becomes clear that one of your selections is not working out, it is best to move quickly and have the “talk” about leaving. Waiting until the “end of the summer” or until the “term ends” only protracts the agony that the other interns are suffering under. Best to part company quickly and move on. The remaining interns will thank you for doing your job.

In the opposite direction, give them permission to give you feedback. How you are sounding on the phone, the tone you take with sellers and the way you are spending your time, are all observations that they can challenge you with. For search partners, giving the interns a code word like “talk time” is a good simple reminder that you two are spending too much time talking with each other and not focused on being in front of sellers!

What to avoid

Allowing interns who are not fully competent to have direct contact with sellers should be avoided – as it limits the crucial time that the searcher spends bonding with a business owner to develop trust. Same holds true for email solicitation which should be put out under the name of the searcher, not the intern.

Sellers may understand that you are supported by them, but not be put off by your having a “team”. They are expecting you to acquire their business and not the interns! It took Adam Barker and Ben Murray of New Forest 6-8 months before they felt confident to have these calls made by selected interns who follow a script from their “intern handbook”.

On the other hand, many searchers early on have effectively assigned a competent intern to handle all broker screening, reviews and evaluations and even to the point of preparing an IOI and LOI – leaving the direct phone/face-to-face discussions with the business owner to the searcher.

During an intensive LOI/Due diligence period, you may need fewer interns to be processing the deal flow as you focus on closing. The highest intensity of intern use will be during the middle of your process which runs from a few months after launch to the days of pre-closing. Be transparent with your current and incoming interns about where you are in the process, the complications that may arise, and what could happen if you do/do not close.

A lasting effect

The near term effectiveness of utilizing a team of interns is significant and if managed effectively, allows the prospecting part of the search to become very efficient and productive. Seeing an intern get a job offer that is a direct result of their work with you is very fulfilling.

Over the long term, some searchers have hired interns into substantial roles once they have bought a company. Paul Thomson at Scottish American brought his intern Kiet Vo with him to his first day of ownership and later recruited former intern Cristian Joe. Dennis Kogen and Bjoern VonSiemens also hired Nazim Akmandil, one of their Berlin-based interns into a business development position soon after they purchased their business.

NIP Investments, an investor in many funded searches, has published a summary of best practices, see: Guide to Internships


The benefits for both interns and searcher are deep and continue to be strengthened as searchers develop best practices that provide great learning experiences for their interns and themselves. Searchers who do not put effort into ramping up their interns quickly do so at their own peril running the risk of “failing to find” a business in the short 24 month time-frame available.

One best practice utilized by some searchers is to assign interns during their on-boarding process to read all of these blog entries and reflect on their own half dozen take-aways, surprises and disagreements.

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 regularly update individual blog posts, add to the Reference section and Search tips, so visit the website regularly.

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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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