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How the Search Fund Process Works
A comprehensive timeline of the search fund journey from fundraising to exit.
Phase 1: Fundraising (3-6 months)
The entrepreneur raises initial search capital from investors to fund the search process.
Key Activities:
- • Develop investment thesis
- • Create pitch materials
- • Meet with potential investors
- • Negotiate terms
Typical Raise:
- • €300K - €500K search capital
- • 15-25 investors
- • 2-year search period
Phase 2: Search (12-24 months)
Systematic identification and evaluation of potential acquisition targets.
Search Criteria:
- • €1M - €5M EBITDA
- • Stable, profitable business
- • Growth potential
- • Management transition need
Activities:
- • Source opportunities
- • Initial screenings
- • Management meetings
- • Preliminary due diligence
Phase 3: Acquisition (3-6 months)
Negotiate terms, conduct thorough due diligence, and close the transaction.
Due Diligence:
- • Financial audit
- • Legal review
- • Commercial analysis
- • Management assessment
Financing:
- • Equity from investors
- • Bank debt (60-70%)
- • Seller financing
- • Management rollover
Phase 4: Operating (5-7 years)
Lead and grow the business as CEO with support from investors and advisors.
Growth Initiatives:
- • Operational improvements
- • Market expansion
- • Digital transformation
- • Team development
Exit Options:
- • Strategic sale
- • Financial buyer
- • Management buyout
- • Dividend recapitalization
Key Stakeholders & Their Roles
Investors
Provide capital, mentorship, and industry expertise throughout the process.
Business Owners
Seek succession planning and legacy preservation for their companies.
Entrepreneur
Leads the search, acquisition, and operation of the target business.
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