What is a Search Fund?
A comprehensive guide to understanding search funds and how they work in the Netherlands market.
The Search Fund Model
A search fund is an investment vehicle where an entrepreneur raises capital to search for, acquire, and operate a single small to medium-sized business. Unlike traditional private equity, the entrepreneur becomes the CEO and leads the company's growth.
This model originated at Stanford Business School in the 1980s and has since become a proven path for ambitious entrepreneurs to acquire and grow established businesses.
Key Characteristics
Single Business Focus
Search funds target one specific business acquisition, allowing for deep focus and expertise development.
Entrepreneur-Led
The searcher becomes the CEO, bringing fresh leadership and growth strategies to the business.
Growth Focused
Emphasis on operational improvements and strategic growth rather than financial engineering.
The Search Fund Process
Fundraising Phase
Raise initial capital (typically €300K-€500K) from investors to fund the search process and living expenses.
Search Phase
Systematically search for acquisition targets over 18-24 months, evaluating hundreds of businesses.
Acquisition Phase
Negotiate and close the acquisition with additional investor capital (typically €2M-€10M).
Operating Phase
Lead the business as CEO for 5-7 years, implementing growth strategies and operational improvements.
Exit Phase
Exit through strategic sale or other liquidity event, providing returns to investors.
Why Search Funds Work
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