Ownership & Acquisition Models
Search fund
You raise money from investors to spend a year or two searching for one solid established company to buy, then run it as CEO while you and the investors share the returns.
- Advanced
- $100K+
- Low risk
- 3–6 months to first customer
These bands place this model against the other 171 in the catalog so comparing them works — orientation, not a quote for your situation or your area. Figures that carry a source are on the Examples tab.
- Asset-light
- Online
- Sales-driven
Often fits: People with capital (or deal-structuring creativity), patience for months of searching and diligence, and the operating temperament to run what they buy.
Often doesn't fit: People without cash reserves, allergic to legacy problems (old staff, old systems, old habits), or looking for passive income, because small businesses are rarely passive.
The simple explanation
Someone spent years building a business; now they want to retire or move on. You buy it: the customer list, the phone number that rings, the trained staff, the cash flow that already exists. Day one revenue replaces the years a startup spends searching for it. The craft is in buying carefully: verifying the numbers, structuring the deal, and not overpaying for a business that depends entirely on its departing owner.
A simple hypothetical example
Illustrative — invented to show the shape of the Ownership & Acquisition pattern. No real company is named, and no figure in it is data. The real, sourced companies for this model are on the Examples tab.
A laundromat owner is retiring; the books show steady earnings, the machines are dated but functional, and there's no website or card payment. You buy at a fair multiple of verified earnings, part seller-financed. Modernizing payments and hours (changes the old owner never bothered with) lifts revenue while the loan amortizes. You bought cash flow and added the easy 20%.
A closer look at search fund
A search fund is a two-stage vehicle: investors first fund a modest 'search' (usually a year or two of salary while you hunt for a business), then get the right to invest again in whatever you buy. You target a boring, profitable, durable small business: recurring revenue, a fragmented market, a retiring owner. You acquire it with a stack of investor equity and bank debt, then run it yourself. The returns in the study are real but dispersed. A handful of winners drive the aggregate, and a meaningful share of funds return little or nothing, so business selection and price discipline are everything.
How money moves through this model
Who pays: The business's existing customers keep paying as before
What they pay for: Whatever the business already sells. You're buying the machine that sells it
What creates profit: Existing earnings, minus debt service, plus whatever your improvements add
- Customer
- Offer
- Search
- Costs
- Profit
What makes this model hard
The honest difficulty: diligence is everything and everything can be misrepresented. Seller-prepared numbers flatter, customer relationships may live in the seller's handshake, and equipment hides deferred maintenance. And after closing, you must actually operate the thing. Buying a job by accident is the classic failure.