Raising Search Capital
Entrepreneurs raise capital by selling units, or shares, in the fund to investors. This capital is used to support salary, administration, and travel and deal-related expenses.
Identifying and Acquiring a Company
After determining a potential target company, we help the entrepreneur evaluate factors such as the industry, current economic conditions and the owner’s willingness to sell. If the decision is made to purchase the company, the entrepreneur structures and negotiates the deal, performs due diligence, secures financing and plans the transition itself.
Operating and Creating Value
During the third stage, new owners immerse themselves in their business, after which they focus on managing and growing the company. Value creation results from operational improvements, increased marketing and sales, and/or expansion into new markets.
Exiting the Fund
The average length of time for holding a search fund is seven years. At the end, the principals and investors evaluate exit strategies so they can gain liquidity and realize returns. Liquidity occurs through dividend distributions, an equity recapitalization, an initial public offering or a sale.
Mowery & Schoenfeld helps aspiring entrepreneurs with limited capital resources search for and acquire a company they can manage and grow, providing them a path for owning and building a business. We have the expertise to help you set up and operate a search fund—an investment vehicle that connects a middle-market firm with the entrepreneur and investors who buy and manage the company.
