Search Funds: How to Buy a Small Business

[@1-person-startup]

Your videos are informative, insightful and very applicable. I hope the quality of your videos stays the same if not better.

[@habibbialikafe339]

his vids r even better now

[@kamdenreyansh1632]

I realize it is kinda off topic but do anybody know a good place to stream new series online?

[@Daniel-ls1gb]

Fantastic video man, really informative on a concept that doesn't receive as much coverage as it should

[@martintapia9374]

Thank you for your tutorship, youre great.

[@franklovscoffee]

Matt, great video on the process. Quick question - where is the source for the success / failure rates you show in 3:25?

[@marcob.8671]

amazing job explaining man!

[@wannabedal-adx458]

Great video as always. I wonder how different is a "search fund" as compared to a Business Development Fund or Company. The concept of a BD company I came across while doing some research for someone else in the Investment Company Act of 1940 (USA). Thanks.

[@Mrconistency]

MBA schools should one consider if they want to start search fund?

[@corhaynes2383]

Dude, great content. How do I get a chance to volunteer at one of those for experience?

[@simonn6746]

Awesome tutorial. Just a question on succession planning aspect, who do they have in mind to sell these small businesses to at the end of the short term of the search fund's life ? (since you said are a lot are SMEs, that are very nascent in implementing organizational structure)..or to phrase it another way, what type of investor would be interested in this still relatively nascent business in 3-5 years when investment must be sold, since there can only be so many operational improvements made in such short of a timeline..?

[@PeakFrameworks]

I've seen a lot of exits to other SMEs, small scale private equity firms, other search funds. It really depends on how big and profitable the company can grow to. There's generally always a buyer if there's a high quality business for sale.

[@nickmalone2731]

I love your videos man!!

[@JKCho]

cool video man!

[@griot1722]

Hey @Peak Frameworks, can you make a video or just reply with information about internships at search funds for underclassmen in college?

[@PeakFrameworks]

Just reach out to a bunch of people at search funds via email. You can look up search fund clubs at HBS or Stanford to find founders. Or look at people who invest in search funds via google and find names that way. If you send in a polished resume you'll probably get a look

[@waynec5208]

Great video. Thanks!

[@freshjiv3]

great video!

[@CoconutPete]

I don't understand why anyone would go through the pain of a search fund when you can simply copy a company

[@wilfredpeake9987]

Some one said it best buying a company is just marketing you get loads of customers for a set price

[@HouseofGhibili]

great stuff!!

[@peterh222]

"coolness of being an entrepreneur" ?? Way to trivialize one of the most profound experiences in a person's life.

[@darksunrise37]

Good video but I think you under-emphasized the operational experience needed to be funded and to succeed at the job.

[@PeakFrameworks]

Not sure how much operating experience you actually need to get funded. From my view it seems like virtually all ex-finance people with MBAs can get funded. At least in Canada, pretty much everyone is just PE / consulting and don't have direct experience into that industry. Most of those search funds seem to turn out pretty well too.

[@tomjens2046]

Wow, so you get paid salaries for when you a searching. And on top you get 20-30% of acquired business. And I was thinking to find a target company and buy it wth investors on equal bases (If I put 10% cash, I get 10% shares - no 20-30% for free, and no 400K for free before even buying).

[@PeakFrameworks]

Yes, you get paid while searching! I think otherwise it would still be too risky for a lot of people.

[@tomjens2046]

@@PeakFrameworks where is the risk? You invest only your time, the same every entrepreneur does when starting any venture. I say people are suckers for paying to seacrh. Searcher should be happy enough he gets invesyment WHEN/IF he finds a deal. Of course if there are suckers who payjust for searcing (and on top of that 20-30%, WOW) , no problem :)

[@Jjjjjaykayyy]

@@tomjens2046 if at the end of the day the investors are positive on their investment from cash flow and from a sale, they are fine shelling out money to start with. Some search fund investors end up with 25x their original investment. I’d shell out 100k for 2.5m. Of course only about 60% of searchers succeed in the search fund process so the risk is if 1. A searcher can find a business with good criteria 2. Can execute the buy 3. Can be a good CEO. If so, everyone wins in the end. But there is a 40% chance you will fail for multiple reasons