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Frequently Asked Questions: Search Funds
Why do a search fund?
There are multiple ways into the world of entrepreneurship, and buying an existing business is one of them. For prospective entrepreneurs who are excited at the prospect of immediately operating a cash-generative business and who are less inclined to build something from scratch this may be an excellent option to consider.
What types of literature and research does the CES have on Search Funds?
The CES has Articles, Cases and Videos. These are listed in full on our Search Funds page.
Is there a standard process to follow?
Although there is not a standard, cookie cutter approach, search funders in the past have found success through networking, making cold calls, getting a mentor, staying focused and keeping multiple deals in the pipeline.
How do I raise the fund?
This is discussed fully on our Search Funds page.
What makes a business attractive for acquisition?
More than 20 factors are listed on our Search Funds page.
How do I negotiate an acquisition?
Here are some tips from past search funders:
- Qualify the seller.
- Understand your seller's motivation.
- Understand what YOU can do, including knowing your limitations and pricing restrictions.
- Understand what really matters to YOU and what does not.
- Be yourself.
- Negotiate, but know that your reputation matters in the long run far more than this deal.
- Don't bluff; be honest.
- Understand that attorneys and agents work for YOU; don't let them get over- committed.
- Make friends with the seller—a sincere friendship.
- Don't do business with bad people.
- Don't be afraid to regroup and step out.
