Beyond capital: how investors can support searcher mental health and well-being

By Dr. Sabina Nagpal, Founder of Radiate Mind

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Over the years, I’ve had the privilege of working closely with both startup founders and search fund entrepreneurs. While their journeys may differ, they often share similar traits – passion, relentless drive, and boundless energy. Interestingly, they also face similar mental health challenges: stress, pressure, isolation, and burnout.

One key distinction, however, lies in the role investors play within the SF ecosystem. In the startup world, only a handful of investors -particularly angel investors- tend to take a hands-on approach with their portfolio companies. But in the SF space, the investors I’ve spoken with are deeply involved in the well-being and success of their entrepreneurs. Whether this is due to the relatively smaller size of the community, which fosters closer relationships, or the psychological profile of people in the SF space, the reality is that searchers lean heavily on their investors throughout the different stages of their journey. 

This insight led me to explore two critical questions:

• Do searchers want mental health support from their investors?
• What are the most effective ways for investors to provide meaningful support to searchers?

The mental health strains on searchers

Last month, at the 6th International Search Fund Conference at IESE Barcelona, I had the chance to engage with the community, listen to panels, and speak with dozens of searchers off the record. From these discussions, it became clear that SF entrepreneurs face clear challenges: isolation, frequent deal failures, and high burnout rates. Finding businesses that meet strict acquisition criteria is difficult, and searchers often lose out to better-resourced private equity firms. In competitive markets like the U.S. and Spain, increased rivalry not only heightens stress but has also reduced acquisition rates.

An investor’s perspective

I recently had the opportunity to sit down with Bramley Johnson, former Director of the International Search Fund Center at IESE, an experienced searcher, seasoned investor, and field expert – to discuss how investors help searchers navigate their unique challenges. We delved into the critical role that investors play in supporting searchers throughout their journey.

Like many SF investors I’ve encountered, Bramley emphasizes the importance of the searcher themselves rather than solely focusing on the business they are acquiring. He prioritizes investing in searchers with strong people management skills and favors individuals who are adaptable. To fully understand their capabilities, he focuses on building relationships with searchers, seeing this connection as key to successful investments.

Bramley shared his approach to supporting searchers, emphasizing the importance of emotional and practical support:

• Availability: he makes himself accessible to searchers, offering advice and a listening ear when they need to talk through deals or personal challenges.
• Encouragement of peer support: Bramley encourages searchers to form support groups with their peers, understanding that solidarity is critical in such a demanding process.
• Collaborative, not competitive: he believes that competition between searchers is counterproductive and urges them to focus on collaboration.
• Informal over formal support: rather than relying on formal programs, Bramley takes an informal approach to support, tailoring his guidance to the unique needs of each searcher. In LA, he used to attend monthly informal meetups over beers with a community of fellow searchers. He fondly recalls how these gatherings often involved a fair amount of venting but also fostered genuine camaraderie—people would share deals, offer valuable advice, and lend support when the journey became especially challenging.

Differences between US and European SF markets

Bramley highlighted several distinctions between the U.S. and European SF markets:

• Market size and competition: the U.S. market is significantly larger and more competitive than its European counterpart.
• Cultural barriers: language and cultural differences play a larger role in Europe, making acquisitions more complex.
• Higher acquisition rates outside the U.S.: currently, acquisition rates tend to be higher in Europe and other regions, possibly due to less competition.

Is the SF model at risk as it grows?

As the SF model expands, Bramley raises a critical question: can it preserve its close-knit, community-driven nature? With more investors entering the space, he’s concerned that some don’t fully understand the model’s collaborative foundation. Increasingly, investors are adopting a hands-off, “commodity” approach, which Bramley believes undermines the spirit of SF investing. Another challenge is emerging as well: with more searchers in the mix, it’s becoming harder to provide the personalized support that has been essential to the model’s success.

From my perspective as a psychiatrist, I would add that the mental health and resilience of searchers could be at risk if the model drifts too far from its roots. Strong work relationships are one of the key pillars of personal resilience. While the SF model has always been attractive for the excitement of its various phases, the sense of community has likely provided essential support, insulating searchers from some of the hardships of their journey.