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Search Fund Insights: Communication, Sentiment, and Multiples

Joe Steigman, Principal at Stegosaurus Ventures
Principal at Stegosaurus Ventures

Key Highlights

  1. The biannual search fund market survey reveals key insights on market performance, communication between searchers and investors, and the difficulties in deal sourcing, aiming to provide these insights on a quarterly basis.

  2. The survey findings reveal interesting trends such as longer search durations leading to more deals under LOI, and traditional searchers offering higher multiples, potentially driving up overall multiples in the market.

  3. The series of surveys provides a valuable resource for understanding the search fund market, enabling transparency, informed decision-making, and growth in the search fund model.

The Motivation Behind the Survey

To understand the search fund market and address the gap in information available to searchers, CEOs, and investors, a biannual survey was conducted to collect data on market performance and trends. The survey primarily focuses on the United States and North America and includes respondents from Europe and Canada. The ultimate goal is to transform the study into a quarterly report.

Key Insights from the Survey

Need for frequent market performance updates
While the Stanford study remains the gold standard, having regular updates on market performance can provide valuable insights for searchers and investors alike. For example, the survey aims to answer questions about the number of deals, leads in the pipeline, and average search duration.

Importance of communication between searchers and investors
One of the findings revealed a desire for increased communication between searchers and investors—when searchers were asked what would encourage more communication, they responded that they wished investors would help them with the deal flow—and better collaboration between parties.

Deal sourcing challenges
A recurring theme in the survey is the difficulty searchers face in sourcing deals, often finding that leads have been exhausted by the time they reach them. A possible solution could involve investors sharing deal flow to support searchers.

Comparing traditional and self-funded searchers' average number of leads in searcher's pipelines versus time spent searching
Comparing the number of leads to the duration of the search for self-funded and traditional searchers

Longer search duration leads to more deals under LOI
The survey found that searching for at least ten months tends to have more deals under LOI than those with shorter search durations.

Emerging Models and Resources

This book by Jan Simon introduces search fund models, such as the holding and shell company models. Furthermore, a new AI-based proprietary software for searchers aims to source deals before they reach the market, offering an innovative approach to deal sourcing.

The search fund model has recently gained significant traction, allowing aspiring entrepreneurs to acquire and operate small to medium-sized businesses. However, understanding the dynamics of this market, the communication between searchers and investors, and the sentiment surrounding the model is crucial for continued growth and improvement.

Key Findings

Based on the results of the second survey in a series tracking the search fund landscape, we found that searchers had fewer leads in their pipelines compared to the first survey. However, they reported more deals during the same period, suggesting a potential relationship between the two variables: leads turn into LOIs in the next period, or LOIs reduce leads in the same period.

Sentiment towards the search fund model saw a slight reduction, with self-funded searchers being the least optimistic group in both surveys. This could be due to various factors, such as their educational background or the early stages of their search journey.

Multiples in the Search Market

One of the most discussed topics in the search fund space is the multiples offered for acquisitions. The survey found that the average EBITDA multiple for self-funded searchers was 4.1, while for traditional searchers, it was 6.1. This data suggests that traditional searchers are making higher multiple offers, which could drive up the market's overall multiples.

Industry Distribution

The survey also highlighted the industry distribution of deals under LOI, with 35% of deals in services, 28% in healthcare, and approximately 20% in technology. This indicates a relatively diverse range of industries where searchers find opportunities.

Graph showing nearly a 20% decrease in the count of fundraisers over the last six months of 2022, yet a 10% increase in success rate.
Less fundraisers, but higher success rate over the last six months (LSM) of 2022

The Importance of Transparency
This ongoing survey series aims to provide transparency and valuable insights into the search fund market for potential searchers, investors, and LPs. By offering a 360-degree view of the market, the survey aims to foster better decision-making and promote market growth.

Availability of Survey Findings
To ensure the accessibility of the survey findings, the full report will be made available to participants. At the same time, those who did not participate will have the option to purchase the information. This approach balances the need for transparency and the value of participants' time and contributions.


The biannual survey sheds light on the key challenges and trends in the search fund market, emphasizing the importance of regular updates on market performance and the need for increased communication between searchers and investors. As the market evolves, embracing new models and resources can help searchers stay ahead in the search process. Understanding the search fund market, sentiment, and dynamics is crucial for all stakeholders. This survey series aims to provide valuable insights and promote transparency, ultimately contributing to the continued growth and success of the search fund model.

Further questions and sponsorship inquiries may be directed to Joe at:

Disclaimer: The findings presented in this survey are based on a limited data set and should not be considered exhaustive or fully representative of the search fund model, specific regions, or industries. This survey aims to provide insights and trends based on the available data and is not intended to be prescriptive or definitive. Actual experiences and results may differ significantly for individual searchers, investors, or search fund operators, depending on various factors such as their unique circumstances, market dynamics, and regional differences. Readers are encouraged to use the information presented here as a starting point for further research and analysis and should not solely rely on the findings of this survey to make decisions or draw conclusions about the search fund model or market.

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