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As we’ve seen over the past 3–4 years, the SF model is experiencing a global boom.
Although it originated in the U.S. more than 40 years ago, the model only began to gain real traction in the last 15 years. Outside the U.S., aside from a few early pioneers in countries like Mexico, Canada, and the UK, most of the world is still in the early stages of developing its own SF ecosystems.
Even the most mature international markets, such as Spain, the UK, Germany, Mexico, and Brazil, have barely a decade of history with the model. In countries where activity is now rapidly increasing, such as France, Italy, Poland, Japan, and Australia, SFs have only been around for 5–6 years.
Today, more than 50 countries have at least one SF operating in their ecosystem. The model has already taken root in around 10 Latin American countries, nearly 20 European nations, 8 countries across the Middle East and Africa, and over 10 in the Asia-Pacific region, although many of these markets only began adopting the model in the last two years.
Just as Silicon Valley wasn’t built in a day, it’s worth reflecting on how long it takes before we can truly speak of a favorable ecosystem in a given country, and what it takes to get there.
Building an SF ecosystem from the ground up requires time, persistence, and the convergence of several key elements: it’s a combination of successful experiences, increasing visibility, and institutional development. The process is organic, cumulative, and typically follows a series of stages:
1/ A pioneer launches the first SF
It all starts with an entrepreneur who discovers the model (often while pursuing an MBA abroad) and decides to become the first local searcher in their country, driven by the dream of acquiring and leading an SME. Most of their early backers tend to be international investors, but their initial challenge is to evangelize the concept: first by convincing local investors, who typically have no prior exposure to the model, and then by educating business owners and advisors that they can be the ideal buyer.
2/ Early local backers willing to take the risk
A handful of visionary investors, often private business angels, family offices, former managers, lawyers, or small private equity professionals (including managers of small buyout funds) are typically the first to support a local searcher. Given the lack of a proven track record in the country and their limited familiarity with the SF model, these investors usually come through personal relationships with the searcher.
They play a critical role. Despite the risk, these early backers tend to have an entrepreneurial mindset, long-term vision, and a high level of patience. Their involvement goes far beyond the capital they provide: they offer credibility, structure, and strategic guidance, and often act as local mentors to the searcher, typically taking a seat on the board.
Through their journey alongside the searcher, they gain first-hand exposure to the model. Many of them go on to become repeat investors in the space, and some may eventually launch dedicated funds of SFs.
3/ Valid the proof of concept with a successful acquisition
A well-executed first acquisition, ideally followed by a successful exit, serves as the key inflection point in validating the SF model. It proves that a searcher can identify a strong SME, acquire it, and create value by scaling and professionalizing the business.
This success builds trust among business owners, advisors, and new investors, while also sparking broader interest from aspiring entrepreneurs considering the path of acquisition and operation.
Moreover, a successful acquisition tends to attract media, academic, and professional attention. If the acquired company grows and eventually exits successfully, it becomes a powerful case study and a beacon for future searchers and investors.
4/ Talent recycling: searchers become investors (the “give back” effect), interns launch the next generation of SFs
After 4–5 years of running the company, a successful searcher who exits well often becomes financially secure, and is eager to reinvest in the ecosystem.
This “give-back” dynamic is powerful: recycling knowledge and capital significantly accelerates the model’s credibility and reach.
These former searchers go on to fund and mentor the next generation, providing not just capital but also operational know-how and strategic insight—true smart money. Many even launch dedicated SF investment vehicles, as seen in many countries, becoming pioneers of institutional capital in the space.
And speaking of talent recycling, many of their interns and analysts, who supported them during the search phase and learned firsthand, often go on to launch the next generation of SFs.
5/ Exposure and education: planting seeds in MBA and university program
As everyone knows, the SF model originated at Stanford University and is now taught at all major U.S. business schools, including Harvard and MIT. Spain has become the second-largest market in the world, thanks largely to the outstanding work done by IESE Business School in promoting the model.
Much of the recent growth across Europe is thanks to schools like INSEAD, LBS, and others that now offer courses, conferences, and case studies dedicated to SFs.
Alumni networks and student clubs have also played a key role in organically spreading awareness and expanding interest.
6/ Institutionalization and local networks
As activity increases, a broad range of supporting structures begins to take shape:
investor syndicates, co-investment platforms, and directories facilitate connections between searchers and capital providers. Local advisors (legal, tax, and financial) gradually develop expertise in SF-specific needs, while regional conferences and dedicated associations bring together searchers, LPs, advisors, and business owners.
These initiatives not only strengthen the community and foster collaboration, but also increase visibility, improve operational efficiency, and accelerate capital flow, contributing to a more mature and professional environment.
7/ Institutional capital and scaling
At more advanced stages, institutional investors, funds of SFs, family offices, and even private equity firms begin to actively support and strengthen the ecosystem. Countries like Brazil, Spain, Italy, Germany, Australia, and Japan are clear examples where ecosystem maturity is now evident.
This evolution brings access to larger pools of local capital, enabling more searchers to launch each year. However, one of the risks of this rapid growth is whether the market can sustainably absorb so many new searchers. In some countries, there is growing concern about reaching a saturation point, although many still believe the generational succession wave creates enough opportunity to support continued growth.
The virtuous cycle of growth:
Once all of these elements are in place, the ecosystem begins to self-reinforce, and a virtuous cycle emerges where:
More searchers => more acquisitions => more exits => more reinvestment and mentorship.
The collective know-how deepens, investor appetite broadens, and the SF model is no longer a novelty, it becomes a legitimate and attractive entrepreneurial path.
Just as Silicon Valley took decades to become what it is today, building a thriving SF ecosystem takes time and intentional effort. But with the right pioneers, committed backers, and enough momentum, countries starting from scratch today could build a robust, self-sustaining ecosystem in as little as 6–7 years.
