*Basic

“A search fund is an investment fund in which investors provide financial support to an entrepreneur, or a group of entrepreneurs while he/she or the gorup seeks to identify and acquire a privately-held company.” - (MIT)[1]

**Intermediate

45.5% of search funds fail. Most often because of lack of time, prioritization, or lack of experience.[2] An average search fund takes approximately 19 months to find and acquire a company. The average starting capital of a search fund is $426,000.[3]

***Advanced

Search funds are different from private equity in that private equity principals take on an advisory, non-operational role with portfolio companies. Search fund principals take on high-level day-to-day management positions within the acquired portfolio company, effectively running the businesses from and after closing.[4]

Sources

[1] Brown, D (2010) Introduction to Search Funds. MIT Sloan School of Management
[2] Kessler, B; Ellis, J (2012) Search Funds: Death and the Afterlife. Stanford Graduate School of Business
[3] Editors. Search Fund. CFI. Corporatefinanceinstitute.com
[4] Jari, R; Wales, S. W (2013) Alternatives to typical private equity funds: search funds and fundless sponsors. Corporate Deal Source. Corporatedealsource.com