Search Funds
Search funds are the ideal solution to the succession problem for German SMEs.
The term ‘search fund’ is used when one or two aspiring entrepreneurs look for a company, acquire it, and continue to run it operationally. The ‘searchers’ are supported by external investors who provide capital for the search phase and the acquisition.
Search funds were developed in the USA, at Stanford and Columbia, and have existed for over 30 years. Search funds are still largely unknown in Germany, although they offer attractive opportunities for successor entrepreneurs and business owners.
The life cycle of a search fund generally lasts between five and eight years and consists of the following phases.
Search Phase
The search fund entrepreneur looks for a suitable target company. The search can last up to 24 months.
Acquisition Phase
Once a suitable target company has been found, it the acquisition process will be started. This phase requires considerable expertise and resources as the team has to deal with the complexity of contract negotiations, financing, and due diligence.
Value Creation Phase
In the value creation phase, the search fund entrepreneur assumes responsibility for the target company as managing director. Significant value growth is to be achieved through the implementation of a strategic plan. This can include operational improvements, expansion into new markets or the implementation of new technologies or business models.
Exit Phase
The shares held by the investors are sold to a new investor or the search fund entrepreneur himself as part of a structured sales process.
Search Fund Entrepreneur
Become a TSP-Search Fund entrepreneur
We accompany outstanding personalities on their path to entrepreneurship through acquisition.
Entrepreneurship requires courage, passion, strength and perseverance
Entrepreneurs rely on their own strengths, we rely on entrepreneurs
