Search Fund from LMM PE

Current tech IB analyst. Ultimate goal is to start a search fund, so I was thinking I should exit to a LMM buyout firm that gets their hands dirty in their portco's? Is this a good idea?

Ideally I'd want to start a search fund right after LMM PE, I do not want to go to B school.

Thank you all

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Comments (5)

  • Associate 1 in PE - LBOs
May 3, 2021 - 2:50pm

Waterrock123

Current tech IB analyst. Ultimate goal is to start a search fund, so I was thinking I should exit to a LMM buyout firm that gets their hands dirty in their portco's? Is this a good idea?

Ideally I'd want to start a search fund right after LMM PE, I do not want to go to B school.

Thank you all

"Is that a good idea" - relative to what? Going to a larger PE fund? If so, then yes - LMM experience will be more helpful relative to experience gained at larger funds if your goal is to start a SF. IMO this is largely due to two main reasons: (i) LMM will provide you with insight into whether or not you may actually enjoy dirty operational work; and (ii) it'll help you understand the unique process considerations when running a deal for smaller companies. 

For what it's worth, search funders I know that came from a LMM with a sourcing component tend to have had a quicker / easier time with executing a deal.  

May 4, 2021 - 10:10am

Thank you for this information it's very helpful.

Have you heard of any associates starting a search fund directly after LMM PE? With no B-school?

Thanks

Array

  • Associate 1 in PE - LBOs
May 4, 2021 - 1:34pm

Absolutely. In fact, out of the few LMM guys I know who ended up starting a SF, I don't know anyone who did LMM PE --> MBA --> SF. All of them immediately started a SF after their time in PE

Why would you want to do an MBA before starting a SF? Raising capital is pretty straightforward and is easier than most people assume. So if you want to do an MBA for the branding in hopes that it'd make raising capital easier, then I don't think it's worth it. And any small business owner won't give a shit about where you want to school. Ultimately, the most difficult part about a SF is finding a company within a reasonable timeframe, and an MBA likely won't mitigate that challenge. 

May 4, 2021 - 4:21pm

Thanks for the reply. So helpful. I do NOT want to get my MBA. I'm a senior graduating this May rn starting MM IB this summer, but I interned for a Harvard MBA searcher sophomore year (and still keep in touch with him), and he told me I definitely have to get my MBA.

He told me an MBA is the only way I would learn the operational/mgmt aspects of running a small business. 

So, I wanted to seek other opinions. This is honestly the greatest news I've heard in a while. I no longer have to lateral to a BB/EB, try to recruit for UMM/MF, and study for my GMAT, and then try to get into Harvard/Stanford.

LMM it is. Super excited about it too, going to start networking.

Thanks again. Are you thinking about searching?

Absolutely. In fact, out of the few LMM guys I know who ended up starting a SF, I don't know anyone who did LMM PE --> MBA --> SF. All of them immediately started a SF after their time in PE

Why would you want to do an MBA before starting a SF? Raising capital is pretty straightforward and is easier than most people assume. So if you want to do an MBA for the branding in hopes that it'd make raising capital easier, then I don't think it's worth it. And any small business owner won't give a shit about where you want to school. Ultimately, the most difficult part about a SF is finding a company within a reasonable timeframe, and an MBA likely won't mitigate that challenge. 

Array

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