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Search Funds Defined: Pros and Cons

via Value Scout

Search funds make good potential buyers for small- and middle-market business owners looking to exit their companies. H. Irving Grousbeck, a professor at Stanford University’s Graduate School of Business, created the search fund concept in 1984, and by 2020, the number of search funds had grown to over 400.

Search fund entrepreneurs differ from private equity investors, as they actively run the acquired business and grow it. So, what is a search fund?