The Bullshit of Search Fund & Entrepreneurship through Acquisition
I asked Myself: “Are You Sure?”. This is the question I asked myself two years ago when I heard about search fund or Entrepreneurship through acquisition.
The shocking thing about a simple question is to start a dialogue with yourself a deep conversation that can clarify, and nourish. But before we dive in my personal tragedy let’s talk about what is a search fund ladies and gentlemen.
A search fund is an investment vehicle, conceived in 1984, through which investors financially support an entrepreneur’s efforts to locate, acquire, manage, and grow a privately held company.
The model offers relatively inexperienced entrepreneurs with limited capital resources a quick path to managing a company in which they have a meaningful ownership position.Since 1996, CES has conducted a series of studies on the performance of search funds . CES has identified and tracked more than 400 search funds raised since 1984 in the United States and Canada.
growing cohort of international funds located throughout western Europe, Latin America, and India are tracked by our counterparts at IESE Business School in Barcelona, Spain. A 2020 CES analysis of 401 qualifying search funds found the aggregate before taxes internal rate of return to be 32.6%, and the aggregate before taxes return on invested capital to be 5.5x.
Sounds we can make a good amount of money easily and be multi- millionaires in span of five to seven years, this is only on paper, let me tell you the hard truth about this dumb method, the real story behind my failure in making this method works.
Everyone that follows my medium, know that I am a tech guy, I’ve working in the Information Technology industry in the last 18 years, started as a software engineer, then study robotics and data science, made the change to data scientist and then working as data engineer in the last three years.
Two years ago I stumbled on a YouTube video from Graduate School of Business Standford talking about the search fund methodology and how it can be implemented without using our money BIG LIE HERE, I’ll tell you later why it’s a big lie. I watched all…