Reflections of an Italian searcher during fundraising

By Marco Marinelli, Founder at BASB Capital

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We want to be part of the Impact Revolution.

I launched my Search Fund a few weeks ago and am currently in the fundraising phase to finance the search. I have followed the traditional Search Fund model – a model that is already well-established in the US, while in Italy we are only recently seeing growing interest.

What these first few weeks of fundraising have taught me

1. If you are convinced of the model, quit your job and take the plunge immediately. Waiting to dive in won’t make the water any warmer. The investment thesis and the investor approach can be refined over time.
2. The most appealing structure for an investor is a strong partnership, followed by a solo searcher and, finally, a fragile partnership. The choice is entirely a matter of personal risk assessment.
3. Investors look at your background, your soft skills and your cap table (the order varies depending on the investor). If you want to fundraise quickly, you should have extensive buy-side IB or PE experience and a vibrant cap table that already shows strong momentum.
4. Always remain polite and professional with investors.
5. Prepare the ground for the search while you are fundraising. It is the perfect time to choose your tools, handle bureaucratic tasks and narrow down an initial list of companies. You have no distractions or pressure; it’s like working at dawn while everyone else is asleep.
6. Many investors who have backed searchers in the past may not join your cap table due to overexposure concerns.
7. Although in-person opportunities to meet investors are limited, they remain irreplaceable for both investors and searchers.
8. You will be entering a marriage that lasts for many years, so cap table definition must always be guided by a long-term view.
9. The increasing demand from searchers in Italy creates a need for new institutional investors to join the community. This momentum is supported by a clear acceleration in promotional activity, particularly within universities.
10. In Italy, there is a lack of specific tax incentives that would stimulate the growth of the Search Fund ecosystem; institutional support will be crucial to unlocking its full potential.

The Impact perspective

In the Italian context, which is rich in small and medium-sized enterprises, this innovative investment model fits perfectly. It is a model that, if applied with diligence and discipline, allows all stakeholders involved to win.

• The seller wins, as they need to sell their company and find a buyer willing to continue their legacy.
• The investor wins, because, as reported in various industry studies, they achieve highly positive returns.
• And the Searcher wins, gaining a unique opportunity to simultaneously secure a role that combines entrepreneurial vision, financial execution and operational leadership.

The brilliance of this model is that it brings together in a single role – the Searcher – a series of activities that most people find incredibly exciting: searching for a company to invest in, executing and coordinating the transaction, leading the company and identifying an exit for investors. If you think about it, anyone else would need two or three lifetimes to achieve all of these milestones, even when targeting a small enterprise. Instead, with this model, all these activities are condensed into a period of about 10 years.

But, apart from financial returns and a high-quality job, what truly elevates this model? I believe it’s the opportunity to generate a positive impact.

Businesses have responsibilities not only toward their shareholders but also toward customers, employees, suppliers and local communities. Keeping a business alive by carrying forward the founding values of the entrepreneur is an operation with a high-impact footprint on the community where the business prospers. Think about the negative consequences for local territories and communities that we have all heard about recently, when companies outside major urban centers have been forced to close.

With the Search Fund model, you make a concrete contribution to the country, helping to resolve a crucial issue like the generational transition in small companies. You foster new entrepreneurship. You give anyone who wants to put themselves out there the opportunity to participate in the industrial revival of a country that has gone through years of intense industrialization followed by a period of industrial stagnation. You simply create impact!