In this paper, I explore how the accelerator model could generate adequate returns by providing a hedge against risks present in the niche private equity model known as the Search Fund.
HireLabs Perspective: Increasing Vc Returns In Talent Assessment FirmsHireLabs Inc.
The VCs must ask themselves if they have CEOs who are capable of driving companies
as the recession bottoms.
Looking at the current slowdown in non-farm employment and the subsequent rebound strategies, HireLabs can forecast a recovery in the international labor market - lead by the US - sometime around Feb 2010 (Q1 2010).
Very few CEOs of venture-backed companies have experience of riding a company
through a recession successfully.
The questions that investors should ask there CEOs is
whether they are able to monetize on market-indicators as the recovery approaches.
Investors who are looking to capitalize on the recovery should predominantly understand the teams that are running the companies, and assess the teams’ ability to analyze and perform the market indicators....
Nearly 900 investors from 700 VC firms responded to the mid-2016 survey covering Deal Sourcing, Investment Decisions, Valuations, Deal Structures, Post-Investment Value Adds, Exits, Org Structures of VCs, LP Relationships.
This document describes the results.
HireLabs Perspective: Increasing Vc Returns In Talent Assessment FirmsHireLabs Inc.
The VCs must ask themselves if they have CEOs who are capable of driving companies
as the recession bottoms.
Looking at the current slowdown in non-farm employment and the subsequent rebound strategies, HireLabs can forecast a recovery in the international labor market - lead by the US - sometime around Feb 2010 (Q1 2010).
Very few CEOs of venture-backed companies have experience of riding a company
through a recession successfully.
The questions that investors should ask there CEOs is
whether they are able to monetize on market-indicators as the recovery approaches.
Investors who are looking to capitalize on the recovery should predominantly understand the teams that are running the companies, and assess the teams’ ability to analyze and perform the market indicators....
Nearly 900 investors from 700 VC firms responded to the mid-2016 survey covering Deal Sourcing, Investment Decisions, Valuations, Deal Structures, Post-Investment Value Adds, Exits, Org Structures of VCs, LP Relationships.
This document describes the results.
Measure What Matters - New Perspectives on Portfolio SelectionUMT
Stock market investors articulate their goals explicitly or implicitly by following the philosophy and methodology of a market expert that fits their investment objectives and appetite for risk. For example, for value and income stocks they may rely on the research conducted by Wharton finance professor Jeremy Siegel¹ or read up on market pros like War-ren Buffet. Much like the stock market investor, companies investing in change face similar challenges when considering where to allocate budget and resources to meet financial and strategic objectives.
HELE 5 Lesson 1: Business Opportunities in the CommunityBenandro Palor
* Spotting and Identifying Business Opportunities
* Strengths, Weaknesses, Opportunities, and Threats (SWOT)
* Difference between Goods or Products and Services
Target Market
* Types of Retail Stores
* Factors to Consider in Putting Up a Retail Store
* Activities in Retailing
* Components of Price
How emerging managers can raise capital, hire the best people, sustain profitability and organize for tax efficiency. More here: http://gt-us.co/1qG5Xlu
Emerging Managers: Small Firms with Big IdeasCallan
Everybody has to start somewhere, including investment managers. Even the largest firms with broad name recognition and substantial assets were once emerging firms.
Emerging managers generally include smaller and newer investment managers, potentially
with atypical ownership structures. While smaller asset pools can work against them in some cases, it can also work in their favor, enabling them to access opportunities that larger, more established investment managers cannot.
Many U.S. institutional investors have long track records of dedicated investments with emerging managers while others are just starting to examine the space.
Emerging manager programs are becoming more commonplace, particularly at public pension funds, as investors recognize the potential portfolio gains that can be achieved through investing with the diverse and entrepreneurial investment managers that make up the emerging manager space.
Callan has long recognized the value that diversity of professionals and firm size can bring to investment outcomes. Our founder Ed Callan was instrumental in launching Progress Investment Management more than two decades ago. In 2010, we launched Callan Connects to expand our universe of emerging manager and minority, women, and disabled owned firms.
In this interview, Uvan Tseng talks with Lauren Mathias, who oversees Callan Connects, about trends and issues in the emerging manager arena.
Ashford Capital Management Small Cap Criteria White PaperCliff Short III
This “Small Cap Effect” has been analyzed, deliberated, and dissected for decades, and subsequent studies have proven that, with some caveats, the out performance of small capitalization stocks on both a risk-adjusted and absolute basis is real.
Week 1 Lecture The Nature of Business ResearchBusiness researc.docxkdennis3
Week 1 Lecture
The Nature of Business Research
Business research covers a wide range of phenomena. For managers, the purpose of research is to provide knowledge regarding the organization, the market, the economy, or another area of uncertainty. A financial manager may ask, “Will the environment for long-term financing be better two years from now?†A personnel manager may ask, “What kind of training is necessary for production employees?†or “What is the reason for the company’s high employee turnover?†A marketing manager may ask, “How can I monitor my retail sales and retail trade activities?†Each of these questions requires information about how the environment, employees, customers, or the economy will respond to executives’ decisions. Research is one of the principal tools for answering these practical questions.
Business research is the application of the scientific method in searching for the truth about business phenomena. These activities include defining business opportunities and problems, generating and evaluating alternative courses of action, and monitoring employee and organizational performance. Business research is more than conducting surveys.6 This process includes idea and theory development, problem definition, searching for and collecting information, analyzing data, and communicating the findings and their implications.
Applied business research is conducted to address a specific business decision for a specific firm or organization. The opening vignette describes a situation in which ESPN used applied research to decide how to best create knowledge of its sports fans and their preferences. Basic business research (sometimes referred to as pure research) is conducted without a specific decision in mind, and it usually does not address the needs of a specific organization.
All research, whether basic or applied, involves the scientific method. The scientific method is the way researchers go about using knowledge and evidence to reach objective conclusions about the real world. The scientific method is the same in social sciences, such as business, as in physical sciences, such as physics. In this case, it is the way we come to understand business phenomena.
A firm can be production-oriented. A production-oriented firm prioritizes the efficiency and effectiveness of production processes in making decisions. Here, research providing input from workers, engineers, finance, and accounting becomes important as the firm seeks to drive costs down. Production-oriented firms are usually very large firms manufacturing products in very large quantities. The third orientation is marketing- oriented, which focuses more on how the firm provides value to customers than on the physical product or production process. With a marketing-oriented organization the majority of research focuses on the customer. Research addressing consumer desires, beliefs, and attitudes becomes essential.
Diagnosing Opportunities: After a.
Measure What Matters - New Perspectives on Portfolio SelectionUMT
Stock market investors articulate their goals explicitly or implicitly by following the philosophy and methodology of a market expert that fits their investment objectives and appetite for risk. For example, for value and income stocks they may rely on the research conducted by Wharton finance professor Jeremy Siegel¹ or read up on market pros like War-ren Buffet. Much like the stock market investor, companies investing in change face similar challenges when considering where to allocate budget and resources to meet financial and strategic objectives.
HELE 5 Lesson 1: Business Opportunities in the CommunityBenandro Palor
* Spotting and Identifying Business Opportunities
* Strengths, Weaknesses, Opportunities, and Threats (SWOT)
* Difference between Goods or Products and Services
Target Market
* Types of Retail Stores
* Factors to Consider in Putting Up a Retail Store
* Activities in Retailing
* Components of Price
How emerging managers can raise capital, hire the best people, sustain profitability and organize for tax efficiency. More here: http://gt-us.co/1qG5Xlu
Emerging Managers: Small Firms with Big IdeasCallan
Everybody has to start somewhere, including investment managers. Even the largest firms with broad name recognition and substantial assets were once emerging firms.
Emerging managers generally include smaller and newer investment managers, potentially
with atypical ownership structures. While smaller asset pools can work against them in some cases, it can also work in their favor, enabling them to access opportunities that larger, more established investment managers cannot.
Many U.S. institutional investors have long track records of dedicated investments with emerging managers while others are just starting to examine the space.
Emerging manager programs are becoming more commonplace, particularly at public pension funds, as investors recognize the potential portfolio gains that can be achieved through investing with the diverse and entrepreneurial investment managers that make up the emerging manager space.
Callan has long recognized the value that diversity of professionals and firm size can bring to investment outcomes. Our founder Ed Callan was instrumental in launching Progress Investment Management more than two decades ago. In 2010, we launched Callan Connects to expand our universe of emerging manager and minority, women, and disabled owned firms.
In this interview, Uvan Tseng talks with Lauren Mathias, who oversees Callan Connects, about trends and issues in the emerging manager arena.
Ashford Capital Management Small Cap Criteria White PaperCliff Short III
This “Small Cap Effect” has been analyzed, deliberated, and dissected for decades, and subsequent studies have proven that, with some caveats, the out performance of small capitalization stocks on both a risk-adjusted and absolute basis is real.
Week 1 Lecture The Nature of Business ResearchBusiness researc.docxkdennis3
Week 1 Lecture
The Nature of Business Research
Business research covers a wide range of phenomena. For managers, the purpose of research is to provide knowledge regarding the organization, the market, the economy, or another area of uncertainty. A financial manager may ask, “Will the environment for long-term financing be better two years from now?†A personnel manager may ask, “What kind of training is necessary for production employees?†or “What is the reason for the company’s high employee turnover?†A marketing manager may ask, “How can I monitor my retail sales and retail trade activities?†Each of these questions requires information about how the environment, employees, customers, or the economy will respond to executives’ decisions. Research is one of the principal tools for answering these practical questions.
Business research is the application of the scientific method in searching for the truth about business phenomena. These activities include defining business opportunities and problems, generating and evaluating alternative courses of action, and monitoring employee and organizational performance. Business research is more than conducting surveys.6 This process includes idea and theory development, problem definition, searching for and collecting information, analyzing data, and communicating the findings and their implications.
Applied business research is conducted to address a specific business decision for a specific firm or organization. The opening vignette describes a situation in which ESPN used applied research to decide how to best create knowledge of its sports fans and their preferences. Basic business research (sometimes referred to as pure research) is conducted without a specific decision in mind, and it usually does not address the needs of a specific organization.
All research, whether basic or applied, involves the scientific method. The scientific method is the way researchers go about using knowledge and evidence to reach objective conclusions about the real world. The scientific method is the same in social sciences, such as business, as in physical sciences, such as physics. In this case, it is the way we come to understand business phenomena.
A firm can be production-oriented. A production-oriented firm prioritizes the efficiency and effectiveness of production processes in making decisions. Here, research providing input from workers, engineers, finance, and accounting becomes important as the firm seeks to drive costs down. Production-oriented firms are usually very large firms manufacturing products in very large quantities. The third orientation is marketing- oriented, which focuses more on how the firm provides value to customers than on the physical product or production process. With a marketing-oriented organization the majority of research focuses on the customer. Research addressing consumer desires, beliefs, and attitudes becomes essential.
Diagnosing Opportunities: After a.
VENTURE CAPITAL
Overview of the Venture-Capital Industry
Types of Venture capital firms
Venture-Capital Process
Stages In Venture Financing
Locating Venture Capitalists
Activities of Venture Capitalists
Approaching a Venture Capitalist
Assignment 3 Case StudyE-Business Strategy and Models in B.docxbraycarissa250
Assignment 3: Case Study
E-Business Strategy and Models in Banks: Case of Citibank
Bank is an institution that deals with money as well as credit. It accepts deposits from the public, makes funds available to those who need then and helps in remittance of money from one place to another (Macesich, George, 2000, p-42). Modern banks today perform a wide range of functions that makes it difficult to give an apt and precise definition of it. One of the famous economists, Crowther had said, a bank “collects money from those who have it to spare or who are saving it out of their incomes, and lends this money to those who require it”. In short, the term bank in modern times refers to an institution that deals with money i.e. accepts deposits and advances loans; has the ability to create credit which basically implies expanding its liabilities as a multiple of its reserves; creates demand deposits and it is a commercial institution that aims at securing profits.
Citibank is a subsidiary of Citigroup. Citibank was founded as City Bank of New York in the year 1918. According to the latest statistics, it is now the third largest bank holding company in the United States by the total assets after Bank of America and JP Morgan Chase. The bank has its retail banking operations spread over more than 100 countries and territories around the world (Harold, Cleveland & Huertas, 1985). Apart from the standard banking transactions, Citibank offers credit cards, insurance and other investment products. Their online services have earned them appreciation from every nook and corner, making them the most successful in the field. The 15 million online users bear testimony to the stated fact. The key people involved in the management of the bank are: Vikram Pandit (CEO), John Gerspach (CFO), Douglas Peterson (COO) and Willliam R. Rhodes, the Chairman.
Strategy literally means the way an action is planned to achieve the desired results. Every company has certain aims that it hopes to conquer. It has a vivid description of what it desires to achieve. The vision statement that company has is an idealized picture which inspires it, energizes its efforts towards directing its actions towards the expected goals (Hambrick and Chen, 2007, p 935-955). Strategic Decision Making, in context of a firm or an organization, is the framing of long term plan of action that aims at resulting in success and profits for the products and services marketed by the company, for instance (Triantaphyllou, 2000, p 320). Strategic decision making is important to outperform the various other competitors in the market. The process of determining appropriate courses of action for achieving organizational objectives and thereby accomplishing organizational purpose is known as Strategy formulation. In today’s era of cut-throat competition in the business environment budget-oriented planning or forecast-based planning methods are insufficient for a large corporation to survive and prosper. The firm ...
Over 100 decision-makers working directly on corporate innovation in Fortune 1000 (Americas, Europe, Asia) corporations share their learnings. By 500 Startups.
Researched AutobiographyPurpose To become familiar with Libr.docxronak56
Researched Autobiography
Purpose: To become familiar with Library sources to help tell the story of your life.
Outline:
Introduction: Introduce your autobiography with a personal story, a meaningful quotation, or a significant statistic.
Thesis: For a narrative essay, the thesis is different than in making an argument. In this case, you need to answer the question “What is this autobiography about, and why is it important to me/a person close to me/my community?” Remember, you’ve chosen either to write about some aspect of your own life, the lives of some of your interesting ancestors, or the life of your community.
Body: Tell the story, incorporating facts you’ve learned from your research. Use the facts to support the main story you have to tell, not to tell it for you. Follow MLA style for this paper.
Conclusion: So what? Why does this story matter to you, your family, or your community? Reflect on this. Whether you’re writing about self, family or community, how does this have a bearing on who you are today?
Works Cited: Sources listed alphabetically by author’s last name.
ENTREPRENEURIAL FINANCE: Midterm
1) Entrepreneurs who establish and go on to create new ventures must classify
types of financing that are in sync with the development stages that the
eventually grow through in its life cycle. While exploring an opportunity phase
of a new plan a firm does not experience significant operating costs, but during
further stages of venture development, financing is crucial.
During the research and development phase, the firm will need major levels of
investment as R&D for innovation of new products, this can be very expensive.
In this stage, bootstrap financing techniques may prove productive. An
interesting example of this type of financing involves the entrepreneur
himself/herself having to put up his/her own resources and funds (also known
as skin in the game). Furthermore, the entrepreneur may receive funds from
their respective families and friends.
During the Start- up stage of a new endeavor, significant efforts are aimed
towards initiating a marketing strategy and launching production of the
company’s offering. Even though at this stage the company is ready to launch
and is experiencing its first revenues, is not profitable. As a result, outside
investors (angels, venture capitalists) are required to help support the firm’s
operating costs and expenses. An angel investment would serve as they are
generally in smaller quantities and can also be presented in accordance with
milestones which are established and agreed upon by investors as well as the
entrepreneur.
During the early-growth stage of the new venture, the business plan has proved
successful so far having launched successfully. The firm must now expand its
operations by recruiting new employees and developing a marketing plan. As a
result, a source of financing in this round could be forthcoming private equity
investors and ...
Writing Proposals and Progress ReportsChapter OutlineWriting P.docxambersalomon88660
Writing Proposals and Progress Reports
Chapter Outline
Writing Proposals
Proposal Questions
Proposal Style
Proposals for Class Research Projects
Proposals for Action
Sales Proposals
Business Plans and Other Proposals for Funding
Budget and Costs Sections
Writing Progress Reports
Chronological Progress Reports
Task Progress Reports
Recommendation Progress Reports
Summary of Key Points
Page 563IN THE NEWS
Proposals by Corporate Investors
Public companies invite proposals from their shareholders on the company’s response to its stakeholders. Corporate investors, led by religious groups and socially responsible investors, have increasingly been bringing forth environmental and social proposals. Often companies work with proponents of these proposals to arrive at mutually agreeable outcomes.
The growth in these proposals has been tremendous—from around 7% to 32% between 2004 and 2007—counting those that garnered at least 15% votes. Among specific issues that these proposals address are companies’ sexual orientation policies, pollution policies, labor policies, efforts on climate change, and political contributions. Some of these proposals find mention in the following year’s annual or corporate sustainability report, while some others result in specific agreements with the company. Proposals can be resubmitted, so it’s in the companies’ interest to take proposals seriously.
Two major examples come from Exxon. The Sisters of St. Dominic were the lead filers on a proposal, which got 31% support, asking for greenhouse gas reduction. A different proposal from an individual investor, which got 27% support, asked for the development of renewable energy sources. Another instance is Domini Social Investments’ proposal asking Home Depot to produce a report on its sustainably harvested lumber. Home Depot agreed to publish on its Web site its wood purchasing policy, including quantitative information.
“Corporate investors . . . have increasingly been bringing forth environmental and social proposals.”
Adapted from William J. Holstein, “A Bumper Crop of Green Proposals,” in BusinessWeek: Managing: Your Board: Armchair MBA, http://www.businessweek.com/managing/content/jun2008/ca20080626_395541.htm (accessed April 11, 2009).
Page 564Learning Objectives
After studying this chapter, you will know how to
Write proposals.
Prepare budget and costs sections.
Write progress reports.
Proposals and progress reports are two documents that frequently are part of larger, longer projects. Proposals argue for the work that needs to be done and who will do it. Progress reports let people know how you are coming on the project.
Writing Proposals
In the workplace, much work is routine or specifically assigned by other people. But sometimes you or your organization will want to consider something different, and you will need to write a proposal for that work. Generally, proposals are created for projects that are longer or more expensive than routine w.
Optimally, a Project Management System is based on a stage and gate approach where the gatekeepers provide portfolio governance. Learn the details of Portfolio Management as well as the four keys to successful implementation by downloading our whitepaper: Portfolio Management.
Portfolio Management for New Product Development: Results of an Industry Practices Study
By Dr. Robert G. Cooper, Dr. Scott J. Edgett and Dr. Elko J. Kleinschmidt
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the what'sapp information for my personal pi vendor.
+12349014282
Abhay Bhutada Leads Poonawalla Fincorp To Record Low NPA And Unprecedented Gr...Vighnesh Shashtri
Under the leadership of Abhay Bhutada, Poonawalla Fincorp has achieved record-low Non-Performing Assets (NPA) and witnessed unprecedented growth. Bhutada's strategic vision and effective management have significantly enhanced the company's financial health, showcasing a robust performance in the financial sector. This achievement underscores the company's resilience and ability to thrive in a competitive market, setting a new benchmark for operational excellence in the industry.
2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
Understanding how timely GST payments influence a lender's decision to approve loans, this topic explores the correlation between GST compliance and creditworthiness. It highlights how consistent GST payments can enhance a business's financial credibility, potentially leading to higher chances of loan approval.
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the what's app number of my personal pi vendor to trade with.
+12349014282
BYD SWOT Analysis and In-Depth Insights 2024.pptxmikemetalprod
Indepth analysis of the BYD 2024
BYD (Build Your Dreams) is a Chinese automaker and battery manufacturer that has snowballed over the past two decades to become a significant player in electric vehicles and global clean energy technology.
This SWOT analysis examines BYD's strengths, weaknesses, opportunities, and threats as it competes in the fast-changing automotive and energy storage industries.
Founded in 1995 and headquartered in Shenzhen, BYD started as a battery company before expanding into automobiles in the early 2000s.
Initially manufacturing gasoline-powered vehicles, BYD focused on plug-in hybrid and fully electric vehicles, leveraging its expertise in battery technology.
Today, BYD is the world’s largest electric vehicle manufacturer, delivering over 1.2 million electric cars globally. The company also produces electric buses, trucks, forklifts, and rail transit.
On the energy side, BYD is a major supplier of rechargeable batteries for cell phones, laptops, electric vehicles, and energy storage systems.
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the what'sapp number.
+12349014282
The WhatsPump Pseudonym Problem and the Hilarious Downfall of Artificial Enga...
SFA Paper
1. Independent Study Project
Taimur Ahmad
Harvard College Class of 2021
Minimizing Risk to Achieve Optimal Outcomes for Search Fund
Entrepreneurs
Introduction:
I recently interned as a private equity analyst at the Search Fund Accelerator in Boston,
Massachusetts. My responsibilities included analyzing financial statements, business models, and
other information in the CIM (Confidential Information Memorandum) to identify potential
acquisition targets, conducting due diligence on acquisition targets by studying their business
operations, studying macroeconomic reports about the locations of these businesses, and
interfacing with brokers to source relevant opportunities. Working alongside one of the most
experienced entrepreneurs at SFA exposed me to the various protocols and norms that govern the
world of search funds. During the course of my internship, I extensively studied literature from
academic institutions around the world to gain further insights into the concept of
Entrepreneurship through Acquisition.
In this paper, I am going to argue that the traditional search fund model should be
replaced by an accelerator or incubator model that emphasizes not only funding but also
providing institutional support to search fund entrepreneurs. This support could take the form of
extensive training, mentoring, exposure to excellent industry practices, and access to important
information in the company’s database.
In order to build my thesis, I am going to first describe the economics of the traditional
search fund model, outline some of the risks and challenges that young entrepreneurs face as
2. they venture out without sufficient guidance to acquire a company, and finally explain how an
accelerator or incubator model could help deal with such challenges.
Economics of the Traditional Search Fund Model:
Note: Much of the information in the following section is taken from the Stanford GSB study
mentioned in the bibliography.
In 1984, H. Irving Grousbeck introduced the concept of a “Search Fund,” which would
allow young entrepreneurs to acquire, manage and grow an existing business. According to the
Center for Entrepreneurial Studies at Stanford Graduate School of Business, which has
conducted a series of studies on search funds since 1996, the concept has become increasingly
popular among private investors and business schools. From 1984 to 2017, $924 million of
equity capital has been invested into search funds, generating an aggregate equity value for
investors of $5.7 billion (and roughly $1.5 billion for entrepreneurs). The graph below, taken
from Stanford GSB search fund surveys, shows the growth in search funds and acquisitions:
3. The search fund process can be split into four stages:
• Raising Capital
• Search and Acquisition
• Operation
• Exit
The capital is raised in two stages: 1) search capital and 2) acquisition capital. The first stage
is used to cover administrative tasks while the search is ongoing and the second stage capital is
used to purchase the company. As explained in a study produced at the Center for Private Equity
and Entrepreneurship at Tuck School of Business at Dartmouth, investors who participate in the
first round of equity financing will buy investment units and receive “the right but not the
obligation to participate further in financing the acquisition.” Investors who do exercise that right
4. are given a stake in the acquired company that is “equal to their pro rata share of distributed
search funds plus a step-up in value.”
The search process involves a number of considerations that might depend on industry
characteristics, geography or the types of opportunistic deals (deals sourced from third parties
such as brokers) available. Generally, entrepreneurs look for industries that are growing,
fragmented and not subject to rapid change. Desirable company characteristics include healthy
profit margins, history of stable cash flows, competitive edge and a lack of customer
concentration. Of course, it is unlikely that any single option will have all the aforementioned
characteristics, so the search process naturally involves tradeoffs. Other considerations involve
size of the company, which might be dependent on the amount of financing available, potential
for future growth, middle management, basic infrastructure, and opportunities for exit. Search
fund entrepreneurs might choose to prioritize some aspects over others and so ultimately the
question of which factors arethe most important is subjective in nature. In fact, Jim Stein Sharpe,
an Entrepreneur in Residence at the Arthur Rock Center in the Entrepreneurial Management Unit
at the Harvard Business School, who has written extensively on entrepreneurship through
acquisition holds a different view, “You don’t want acquire a “great” business. You will have to
pay a premium for a great business and will have little opportunity to improve it. Instead, your
search sweet spot should be a “not- so-great” or “good” business that you can purchase at a
“great” price, and then transform into a “great” one.” The process involves evaluating limited
and more generic information about the company and industry first. If the company matches the
searcher’s standard, a Letter of Intent is submitted and a more detailed analysis of the company’s
operations and financial statements begins.
5. If the company is acquired, searchers, now acting as CEOs, have to create equity value in
the company for themselves and their investors. The study identifies three areas in which this can
be done:
• Revenue Growth in Operations, which can be carried out by enhancing sales and
marketing strategies, expanding geographically, introducing new products/services,
expanding margins through cost reductions or operating leverage, and usingadd-on
acquisitions.
• Valuation Multiple, which will involve buying at lower multiples and selling athigher
multiples.
• Financial decisions, which involve cost of capital and capital intensityreduction.
Risks Present in the Traditional Model:
The 2018 Stanford Study shows that search funds in aggregate provided an ROI of 6.9x
and an IRR of 33.7 percent. The median fund returned 1.0x of initial search fund investors’
capital, whereas the 75th percentile fund returned 2.9x and an IRR of 31 percent. However, a
small number of search funds have disproportionately increased the aggregate returns. Excluding
the top performers, the returns decrease. The pattern has been quite consistent over the years for
both Return on Investment and Internal Rate of Return. The exact figures can be seen in the
following figures taken from the same search fund survey:
6. Moreover, the returns quoted earlier are returns to investors to investors, not individual
entrepreneurs. Investors can have a portfolio of search fund investments, which helps
7. spread risk on their part, but the entrepreneurs are responsible for their particular acquisitions
and thus are at a greater risk of failure. The following figure shows that 31% of search fund
entrepreneurs were unable to acquire a business. Of the ones who were able to acquire a
business, 29% made a loss.
There are many factors that could impede the success of a search fund. First of all,
there are risks involved in searching for the right company. Searching for the right company is
an arduous process that requires a significant investment of time. The entrepreneur might fail
to identify a company-specific risk, such as customer concentration, churn, weak middle
management or poor prospects of future growth. They might miscalculate or misidentify
8. industry traits such as growth/decline trends, level of regulation, technological change or legal
and/or environmental risks. The search process can also be an emotionally challenging one
and an entrepreneur always needs to be on guard against emotionally-driven and irrational
decisions. Saying yes to a bad deal and finding oneself in a frustrating position where one
cannot grow or improve the business operations of a company could perhaps be worse than
finding no deal at all.
Even if a searcher is able to acquire a company, he/she might find it challenging to
operate and grow it since most search fund principals have little or no experience managing a
company as a CEO. They might find it hard to scale the learning curve quickly if they are
simultaneously dealing with issues as varied as inadequate infrastructure and demotivated
workforce to declining industry sales and competition from foreign market players. Most
search fund entrepreneurs have never faced such problems running an actual business and
might find themselves constrained by inexperience and a lack of institutional support. This
problem could be aggravated if a searcher decides to acquire business somewhere where they
are not fully acquainted with the local workforce culture or regulations, resulting in frictions
with other stakeholders. Although most searchers acquire companies in the same region where
the search fund is located (43% acquire in the same state, 14% in the same region while 43%
acquire in some other region according to the 2018 Stanford Study), the trend might change in
the future. With the growing popularity of search funds in Latin America and Europe,
according to a study carried out by IESE Business School in Barcelona, Spain, this challenge
might become more significant as entrepreneurs look for suitable acquisition opportunities
away from the geographical location of their funds.
9. The Accelerator Model:
The Accelerator or the Incubator Model provides institutional support to entrepreneurs
that could potentially mitigate many of the aforementioned problems. With proper
infrastructure in place, these accelerators are designed in a way that maximizes the efficiency
of the search process. Some of the following arguments are explored at length in a paper
sponsored by Dr. Steven N. Kaplan at the University of Chicago Booth School.
Searchers often have a team of analysts and interns to help develop the search pipeline.
They can help with the search process by cold-calling/emailing business owners or directly
interfacing with brokers to inquire about potential acquisition opportunities. With a well-
trained team assisting the entrepreneur, the process becomes less time and energy consuming
for the searcher.
Having the support of a well-known accelerator could also mean that the searcher does
not have to spend a lot of time developing and maintaining relationships with intermediary
bodies and can instead focus mainly on searching for the right opportunities. This might further
help alleviate some of the fears and doubts of the sellers as accelerators not only have an
established reputation but also a committed source of capital from experienced investors.
Moreover, there are opportunities for mentorship and guidance, which could prove to be
invaluable for the inexperienced and often young searchers. Most accelerator managers have
experience pursuing acquisition opportunities in the past and, as a result, have developed
significant relationships with individuals in various industries as well as with investors in
traditional private equity and/or ETA spheres. Such learning opportunities allow searchers to
avoid common pitfalls early on and quickly scale the learning curve as opposed to engaging in
trial and error experiments in a race against time and limited resources. The IESE study
10. mentioned earlier views the model as being based on a three-legged stool: the entrepreneur is the
jockey, the investor is the trainer and the company is the horse. In order to succeed in the search
race, collaboration among the trainer and the jockey is essential. After all, the incentives are
aligned in a way that for the investors to enjoy a reasonable return on their investment, the
entrepreneurs have to do well. The authors of the study describe how “there is something
symbiotic about the model that traditionally has brought together more empathetic investors with
grounded and idealistic entrepreneurs.” The different ways of analyzing acquisition opportunities
could complement one another and optimize the search process in a way that otherwise would
not be possible.
In accelerators where there is a cohort of entrepreneurs, searchers stand to benefit from
learning from one another, especially those who join the cohort later and, as a result, are much
more inexperienced. Gradually, a body of institutional knowledge builds over time, which might
not be invaluable for entrepreneurs in the first few cohorts but delivers great value to those
joining the accelerator late. The firm might have certain types of data in their database pertaining
to, for example, types of opportunities available in different industries in terms oftheir
profitability and growth, profiles of different brokers, acquisitions that have succeeded or failed
in the past and so on. Research by an individual entrepreneur, especially because they are
constricted by time, risks being not as detailed or accurate as that collected by an accelerator
with a cohort of entrepreneurs over time.
At this point, it would be appropriate to address the question of whether these benefits
can be achieved or even enhanced by either a) a self-funded model b) a model where the
entrepreneur is backed by a group of investors but not in an accelerator/incubator. So far, I have
avoided commenting on the self-funded model simply because there is very little data available
11. on it. The most extensive study carried out so far, the Stanford GSB study, omits the model in
its study. Hence, I am going to limit my evaluation of the model to purely a qualitative analysis.
While in a search-funded model, the upside might be greater since the searcher does not
have to split the equity and share the returns with the investors, the downside is greater too. In
the case of a non-acquisition or an acquisition that does not generate sufficient returns, the
searcher loses personal resources and/or those of his close friends/family members. This could
mean that he/she faces an unusually high pressure running the firm due to the risk of losing
personal assets and relationships. Moreover, there are limited or no opportunities available to
contact experienced investors and solicit their advice. As mentioned earlier, the learning curve
in the search process is steep and making the right decisions in a limited period of time without
external guidance/mentorship can be hard.
For the second model, it might be possible to contact an experienced investor base and
seek their help but that requires reaching out to investors who will not only provide the capital
but also express a willingness early on to maintain contact and give advice. Selecting the right
group of investors could be crucial here especially since investors who participate in the first
round of equity financing have the right but not the obligation to participate in further
financing. An entrepreneur who wishes to engage in additional funding for product growth or
inorganic growth through acquisition will have to be mindful of that fact.
In the accelerator/incubator model, these challenges are effectively dealt with since the
investor is backed by managers and investors with a committed pool of capital who not only
provide financing at various stages of the company but also help with legal and accounting
issues during the acquisition. They provide an environment where the entrepreneur has access to
guidance of experienced individuals as well as the institutional knowledge of the accelerator
12. body. The benefits are designed into the system. One possible criticism could be that an
entrepreneur has to give up a significant amount of equity to have access to these advantages.
While there might be some truth to that, the answer ultimately depends on an individual
searcher’s preferences and appetite for risk. I believe that an accelerator model provides a fair
tradeoff by providing protection against myriad risks in the search process.
Concluding Observations:
The search fund asset class has demonstrated impressive growth over the years with high
returns to investors. However, by solely emphasizing returns to investors who have the benefit
of diversifying their portfolio by investing in a number of search funds, we carry the risk of
ignoring or downplaying the risks that individual entrepreneurs face. As mentioned earlier in
the paper, 31% of searchers fail to acquire a company and 29% exit making either a partial or
full loss. By replacing the traditional search fund model with an accelerator or incubator one,
we can install certain systems in place that reduce the risk of searcher failure. Institutional
support for these search fund entrepreneurs would mean access to the accelerator’s extensive
database, a network of experienced managers and investors, a team of analysts and interns to
help reduce the burden of developing a search pipeline, and a cohort of fellow entrepreneurs to
learn from and impart knowledge to.
Working at the Search Fund Accelerator has allowed me to study how such a system
could be implemented practically. While searchers may still be required to invest significant
time and resources to acquire and run the right business, the institution of an accelerator
provides an important hedge against many types of risks present in the search process.
13. Bibliography
Stanford Business School – Search Fund Resources website.
<https://www.gsb.stanford.edu/faculty-research/centers-initiatives/ces/research/search-
funds/primer>
Austin Yoder & Peter Kelly (2018). Search Fund Study: Selected Observation,
Stanford Graduate School of Business.
<https://www.gsb.stanford.edu/gsb-cmis/gsb-cmis-download-auth/469696>
Josh Dennis & Erick Laseca (2016). The Evolution of Entrepreneurship Through Acquisition,
University of Chicago Booth School.
<https://polsky.uchicago.edu/wp-content/uploads/2018/03/Booth-Research-Evolution-
of- ETA_FA110716.pdf>
Rob Johnson (2014). Search Funds – What has made them work? IESE Business School,
University of Navarra
< https://media.iese.edu/research/pdfs/ST-0357-E.pdf>