Search Funds

A search fund is an investment vehicle, conceived in 1984, through which investors financially support an entrepreneur’s efforts to locate, acquire, manage, and grow a privately held company.

The model offers relatively inexperienced entrepreneurs with limited capital resources a quick path to managing a company in which they have a meaningful ownership position.

Since 1996, CES has conducted a series of studies on the performance of search funds. CES has identified and tracked more than 500 search funds raised since 1984 in the United States and Canada. The growing cohort of international funds located throughout Western Europe, Latin America, and India are tracked by our counterparts at IESE Business School in Barcelona, Spain.

A 2022 CES analysis of 526 qualifying search funds found the aggregate pre-tax internal rate of return to be 35.3%, and the aggregate pre-tax return on invested capital to be 5.2x.

Featured Research

For those contemplating pursuing a search fund, or investing in one, the Center for Entrepreneurship Studies has created a practical guide to answer the most frequently asked questions.

2022 Search Fund Study: Selected Observations

Peter Kelly, Sara Heston
The 2022 Search Fund Study reports on the financial returns and key qualities of search funds formed in the United States and Canada since 1984. This…

Highlights from the 2023 Search Fund CEO Conference

Case Study

Search Fund Team Building Survey Selected Observations

Peter Kelly, Sara Heston, Andrew Freiman
This study examines the executive hiring and termination decisions of 40 search fund CEOs during their first two years post-acquisition. CEOs from…

Related Faculty

Search Fund Studies

Think Like An Owner
Sara Heston & Peter Kelly – Stanford Search Fund Study – Ep.131

Together at Stanford, Sara and Peter, among other projects and teaching, assemble the Stanford Search Study that has been released every year on even years.

Search Funds and Entrepreneurial Acquisitions Book Cover
Related Reading
By Jan Simon

In this book, Jan Simon, Managing Partner of Vonzeo Capital and Academic Director of the International Search Fund Center at IESE Business School, presents a best-practices-based roadmap for searchers, acquisition entrepreneurs, investors and board members.

Articles on the Search Fund Model

The New York Times
March 15, 2024

Young Entrepreneurs Find a Way to Indulge Their C.E.O. Dreams

H. Irving Grousbeck, Peter Kelly
November 10, 2022

How Entrepreneurial MBA Grads Can Benefit from Search Funds

Features Sara Heston, Associate Director of Stanford GSB’s Search Fund Project, on the growing popularity of search funds as an alternative path to entrepreneurship.
The Wall Street Journal
March 20, 2022

MBAs’ Latest Pitch to Investors: Skip the Startup, Invest in Me

This article highlights the growth of search funds at Stanford GSB and shares the networking and mentoring support offered by the model.
October 09, 2013

Stanford's B-School Sensation: Plot a Takeover in Two Weeks

In Stanford GSB’s Entrepreneurial Acquisition class students learn how to buy companies and start something new.
February 07, 2013

Business-Buying Search Funds Gain Momentum

The New York Times
February 11, 2009

Business Opportunities Abound, Even in Bad Times

The New York Times
March 11, 2009

Paying Entrepreneurs to Buy the Right Business

Financial Times
October 13, 2009

Alternative Source of Funding

Faculty Spotlight
The MBA Class of 1980 Adjunct Professor of Management

Professor Grousbeck helped conceive of the search fund and advises many of the entrepreneurs who have used them. He expects that the use of search funds will continue to grow. “It’s the most direct way I know for aspiring MBA entrepreneurs to get into business for themselves. And now that there are many experienced search-funders out there, those who have gone earlier are advising those who have come along more recently. Our objective is to have the search-fund model grow, flourish, and be self-supporting, as one wave helps the wave behind it.”