A Primer on Search Funds: A Practical Guide for Entrepreneurs Embarking on a Search Fund

Four decades have passed since the concept of a search fund was introduced to the business world. Over time, the ingenuity of both entrepreneurs and investors has given rise to a variety of models and deal terms. Search funds continue to evolve and adapt to the times.

This updated edition reflects developments in the search fund ecosystem that have emerged or become more prominent since the release of the 2021 Primer. It draws on the biennial Stanford Search Fund Study and interviews with investors, lawyers, search fund entrepreneurs, and other stakeholders. Figures have been updated, and select deal term developments are reflected in the text. Many exhibits—particularly legal document templates—have been brought up to date with materials contributed by law firms currently active in the ecosystem.

This Primer focuses on the core search fund model, in which an entrepreneur raises a fund from a consortium of investors to find and acquire a business, and highlights practices that have proven effective within that framework. This Primer does not attempt to catalog all model permutations or describe term variations that have not consolidated as enduring features of the traditional search fund model.