What is the goal of a search fund?

Search funds allows investors access to a new CEO who can access businesses which otherwise might be seeking traditional private equity investment or a trade sale.

Is a search fund worth it?

In an exit, that 25-30\% stake could be worth a huge amount if everything goes well. In short, it’s a high-risk, high-potential-reward role. You’ll make more money than if you start a business from scratch, but you will not earn much until you find a company, acquire it, run and improve the business, and then sell it.

Is search fund private equity?

Search funds are specialized “micro” private equity funds that are formed generally by one or two individuals for the specific purpose of acquiring one target company that the principals of the search fund then operate.

How much do search funds pay?

While you search and operate, you will be paid a salary commensurate with your experience and location. Typically, we see searcher salary around $130,000, and CEO salary is around $180,000, which will grow as you gain experience.

Is a SPAC a search fund?

Search funds are different from Special Purpose Acquisition Companies (SPACs) because the equity capital in a search fund is private versus publicly traded in a SPAC. SPACs also include a “promote” or “sponsor promote” provision where the management of the SPAC receives 20\% of the equity.

What is search fund lending?

The Search Fund Lending team is a leading partner that understands the search fund model and the goal of entrepreneurs. Whether you are looking to acquire your first business, expand your existing portfolio or restructure existing debt, the team can help with flexible and customized deal structures and endless support.

How much money do you need to start a search fund?

An average search fund takes approximately 19 months to find and acquire a company. The average starting capital of a search fund is approximately $426,000.

Why are SPACs so popular right now?

The SPAC model has become popular because “in some ways it is fulfilling a need” for both firms going public and investors,” Roussanov continued. Firms filing for IPOs are only allowed to report historical financial performance, but with startups “it’s all a bet on the future,” Drechsler said.

What is SPAC vs IPO?

SPACs versus IPOs In an IPO, a private company issues new shares and, with the help of an underwriter, sells them on a public exchange. In a SPAC transaction, the private company becomes publicly traded by merging with a listed shell company—the special-purpose acquisition company (SPAC).

How does a search fund make money?

Search funds target different companies from other common asset classes in private equity. Search funds purchase companies that are already established and profitable, and that have often been around for many generations, thus differentiating them from venture capital.

What does it take to be a search fund entrepreneur?

Search Funds: What You Need To Know About This Investment Model Raising capital. You will need to raise capital for your fund and this will depend upon your budget regarding salary, administrative, travel and deal related expenses. Identifying a business. You will be required to network, cold call, research, and pitch to prospective businesses wishing to be acquired. Making an acquisition.

What is a focused fund?

DEFINITION of ‘Focused Fund’. A focused fund is a that holds a relatively small variety of stocks. A focused mutual fund focuses on a limited number stocks in a limited number of sectors, rather than holding a diversified mix of equity positions.

What is Foundation search?

The SEARCH Foundation was formed in 1997 to assist event, meetings and hospitality professionals faced with a life threatening illness. Since that time it has expanded to include not only illness, but also any catastrophic occurrence. Crisis means many things to many people.