I'm finishing up my MBA at Wharton right now and am starting a search fund right now. I've read that PE firms are starting to eat into search fund territory in terms of company type ($1-$3 million EBITDA). If that's the case, perhaps search funders can use some of the same deal sourcing techniques/platforms that PE firms use? Would love to get some advice on resources and avenues to build a pipeline. Any informal avenues are interesting as well (few PE friends of mine across firms have their own GroupMe set up).
Sidenote: totally open to having summer interns! Feel free to shoot me a PM.
I got my feet wet in finance interning for a searcher from H/S/W and ended up spending a few months hiring and training a team of interns and effectively running the daily ops while he handled some higher level items. We tried a number of different sourcing methods, including some of the PE platforms like Axial. Ultimately, we found that the two most effective avenues were thematic proprietary sourcing from public industry directories and data aggregators, and sourcing via business brokers. I'd imagine that one of your friends in IB/PE could also run a CapIQ screen and pull an extensive list of businesses in your target industries, as well as business brokerages and micro-boutiques. Not sure if this directly answers your question, just my experience with the matter at hand.
Good luck with your search! I started my path to finance late in the game (post-UG), and would NEVER have made it in so quickly if it wasn't for my search fund experience. I have a lot of respect for searchers, and wish you all the best.
Dude this is gold. You're the man. Sending you a PM now hahaha.
The Stanford search primer is a great read and will help answer many questions - https://www.gsb.stanford.edu/sites/gsb/files/files-fpp/26891/ces-search…
TLDR, not all search funds achieve 20-25% IRR (but neither do all PE funds), however the average IRR since inception is 35%+. Raising a search fund is relatively easy if you come from a Top 7-10 MBA as investors view the search investment as a cheap call option (with the option to invest pro-rata in the acquisition). Also, most companies of this size end up levering up around 50% of the cap structure through a combination of senior, sub, and/or seller debt. The backers are a combination of institutional funds (Pacific Lake, Anacapa Partners) and HNW individuals, mostly who have been successful in search funds and/or private equity.