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The traditional SF model is risky. According to the latest SF Study by Stanford, out of 524 SFs that concluded their search in the USA/Canada, 328 made an acquisition (63%) while 196 did not (37%), failing in their quest for the perfect deal. The conclusion is clear: searching for a business to buy is a challenging and often lonely journey.
Created nearly a decade ago (in 2015), SFA (Search Fund Accelerator) was the first highly specialized “coaching organization” in the SF world. SFA focuses exclusively on the success of its searchers and CEOs, assisting them in finding, buying, and managing outstanding businesses, and, crucially, creating a community of entrepreneurs.
Although it was somewhat controversial within the ecosystem at first due to its deviation from the traditional SF model (where the primary criterion for selecting a potential CEO is their ability to pitch and convince investors to raise their own SF, and the search process assesses their ability to find the right business and plan for its future operations), it must be acknowledged that the SFA model works. It has since been imitated in various ways.
Currently, there are diverse models worldwide: Single-investor (where a sole investor, typically a PE firm, family office, or single business angel, sponsors the search), Accelerators, ETA Platforms, EIR (Entrepreneur in Residence) programs, and more.
Most of these models offer similar services: providing the cash needed for the search period (sponsoring or giving access to their fundraising network), training, database access, shared interns, mentoring, bank introductions to leverage the deal, prearranged legal and accounting relationships, help during the management phase, and support through board presence, etc.
One of the most successful in Europe & North America is Novastone Capital Advisors, which has developed a team of over 40 professionals to support their searchers. They have completed nearly 20 acquisitions in the past 3 years. Other notable local players are also emerging and playing significant roles in their respective ecosystems, such as Search Fund Japan and JaSFA in Japan, SMEVentures in Australia, or Seqos Capital in Germany, to name a few. Recently, 2 new European players have launched: Belgium-based Wad Capital and German Tembo Search Partners, and a new one in Italy will be announce soon.
If you are considering acquiring a company and are unsure whether to raise your own SF or explore potential partnerships with one of these organizations, we have created a new section in our professional directory to help you discover what they can offer. You can find a dozen here (and we will continue to update it in the near future):
