Making the Most of Your MBA to Launch a Search Fund: A Roadmap for B-School Students
You're a bright-eyed, ambitious MBA student, soaking up all the business knowledge you can get. Somewhere between a finance lecture and a late-night case study session, you stumble upon the concept of search funds. It's a lightbulb moment – a spark of intrigue that ignites a new career possibility. Could this be the path you've been looking for?
If you're nodding along, you're not alone. Many top-tier MBA students find themselves drawn to entrepreneurship through acquisition (ETA). The beauty of being in business school is that you have a unique window of time to thoroughly explore this path before diving in headfirst.
Embarking on a search fund journey requires grit, determination, and a healthy dose of self-awareness, but here's the core message I want to share from my own experience and countless conversations with searchers:
If you're a talented individual with a genuine passion for entrepreneurship, and you're willing to put in the work, you can absolutely raise the capital you need and build a successful career as a search fund entrepreneur.
The key is to use your MBA experience wisely to answer two fundamental questions...
Two Questions to Guide Your MBA Journey
(and the Next Decade of Your Career)
Your MBA is a precious resource. Don't squander it on half-hearted exploration. To truly make the most of this time, you need to ruthlessly focus on answering two pivotal questions:
Is the search fund path REALLY what I want for the next decade?
This isn't a short-term gig; entrepreneurship through acquisition is a long-term commitment. We're talking 5-10 years, minimum, of your life dedicated to finding, buying, and running a business. That's a solid chunk of your prime career-building years.
Before you leap, take a hard look at the alternatives - the cushy corner office in a Fortune 500 company, the adrenaline rush of building a disruptive startup, the legacy and stability of taking over the family business. Each path offers unique rewards and challenges.
So, ask yourself: Does the search fund model light a fire in your belly that burns brighter than any other option? Can you envision yourself happily immersed in this world for years to come?
Am I genuinely well-equipped to succeed in both acquiring AND operating a business?
Search funds aren't for the faint of heart. Acquiring a business is a complex, multi-faceted beast, and that’s only half the battle. The real test comes after you sign on the dotted line. Can you step into the CEO role and actually run the company effectively?
Take an unflinching inventory of your skills, experiences, and passions. Do you have the financial acumen to analyse deals? The operational chops to optimise a business? The leadership qualities to inspire a team? And perhaps most importantly, do you have the resilience to weather the inevitable storms that come with entrepreneurship?
These two questions might seem daunting, but that's the point. They're designed to spark deep introspection and honest self-assessment. Your MBA is the perfect sandbox to experiment, learn, and ultimately decide if this is the right path for YOU.
Your MBA Action Plan: Knowledge, Connections, and Getting Your Hands Dirty
Alright, you've got the big questions in mind. Now, let's get tactical. Here's how to strategically use your time in business school to figure out if the search fund path is truly for you:
Content Consumption: Become a Search Fund Nerd
Don't be shy about diving headfirst into the world of search funds. Devour everything you can find:
Blogs: Check out ours (you’re here!), Jim Sharpe's blog, and other reputable sources for insights and stories.
Podcasts: Tune into the Search Fund Podcast to hear real-life journeys from searchers and investors.
Books: Grab a copy of Buy Then Build or The HBR Guide to Buying a Small Business to get foundational knowledge.
But don't just passively consume. After reading an article or listening to a podcast episode, take a few minutes to reflect. Does this information make you more excited about the search fund model? Does it raise concerns or doubts? Each piece of content is a chance to test your answers to those two big questions.
Conversations with People: Learn from Those Who've Been There
There's no substitute for talking to real people who have walked the search fund path. Seek out:
Successful searchers: Learn about their strategies, challenges, and the day-to-day realities of running a business.
Current searchers: Get a glimpse into the nitty-gritty of the search process and the ups and downs they're facing.
Searchers who have exited: Understand what it takes to create a successful exit and what they learned along the way.
Don't forget those who faced setbacks: Their stories are often the most valuable, offering lessons on resilience and what to avoid.
These conversations aren't about pitching yourself or fishing for investors (more on that later). They're about gathering information, asking insightful questions, and gauging how their experiences resonate with your own goals and values.
Real-World Small Business Experience: Get Your Hands Dirty
The search fund world can seem pretty glamorous from the outside, but the reality of running a small business often involves less-than-glamorous tasks: managing payroll, dealing with unhappy customers, fixing leaky faucets... you get the idea.
If you've only worked in big corporations or startups, make it a priority to get some hands-on experience in a small business environment. This could be an internship, a short-term consulting project, or even volunteering your time.
Pay attention to your gut reaction. Does the day-to-day grind energise you or drain you? Does the potential for impact outweigh the challenges? This real-world experience will be invaluable in answering that second big question: Am I really cut out for this?
By the time you reach the end of your MBA, you should have a much clearer picture of whether the search fund path is right for you. You'll never have 100% certainty, but aim for at least a 90% confidence level. If both answers are a resounding "yes," then it's time to take the next step.
My Search Fund Origin Story: Lessons from the Wild West Days
Back when I first stumbled upon search funds, it felt like venturing into the Wild West. There wasn't nearly as much information out there as you have today. No podcasts, few blogs, and the Stanford Search Fund Study was still a relatively new resource.
So, how did I navigate this uncharted territory? Sheer grit and good old-fashioned networking. I worked every connection I had, talking to professors, reaching out to searchers (often cold), and relentlessly asking for introductions. It was like a scavenger hunt for knowledge, piecing together bits and pieces of information to form a clearer picture of this mysterious model.
Looking back, those early conversations were invaluable. Every searcher I spoke to had a unique story, a different set of experiences and perspectives. By comparing their journeys to my own background and aspirations, I started to get a better sense of where I might fit in this world. (That's actually a big reason why we created the Search Fund Podcast – to share these diverse stories and help you find your own place in the ETA landscape.)
Of course, I made my share of rookie mistakes along the way. Like approaching investors way too early in my exploration, before I'd really done my homework. I thought I was just having casual coffee chats, but in their minds, I was pitching them to invest. Awkward!
Those early missteps taught me a valuable lesson: Don't rush into investor conversations. Take the time to educate yourself, refine your strategy, and develop a compelling story before you start seeking capital.
Now, you have a much easier time of it. With the wealth of resources available today, you can fast-track your learning and avoid some of the stumbling blocks I encountered. But the core principle remains the same: learn from others' experiences, reflect on your own aspirations, and take the time to truly understand this path before you commit.
The Moment of Truth: Are You All In?
As you approach the end of your MBA program, the finish line is in sight, but so is the decision point. Have you used your time wisely to answer those two big questions?
Remember, the goal isn't to have *all* the answers or eliminate every shred of doubt. Aim for a 90% confidence level – a gut feeling that you're on the right track and ready to take the plunge.
If both answers are a resounding "YES!" – if the search fund path still excites you and you believe in your ability to succeed – then congratulations! You've made it through the first part of the journey.
Now it's time to shift gears. Start preparing your Private Placement Memorandum (PPM) or other fundraising materials. Reach out to your network and begin building relationships with potential investors. With thorough preparation and a clear vision, you'll be well-positioned to raise capital and launch your search with confidence.
But if your answers are less than enthusiastic, don't despair. Your MBA exploration has been a valuable investment, helping you understand what you *don't* want in your career. There are countless other paths to entrepreneurial success waiting to be discovered.
No matter what you decide, embrace the challenges and celebrate the rewards of this unique path. The search fund journey is a rollercoaster, but for those with the right mindset and preparation, it can lead to unparalleled personal and professional growth.
So, are you ready to take the leap?
Your Turn: Ready to Take the Next Step?
So, fellow MBA students, where does this leave you? If you're still fired up about search funds, here's what I recommend:
Hit me with your thoughts and questions in the comments below. I'm always eager to hear from aspiring searchers and offer whatever guidance I can.
Don't go it alone! Connect with other like-minded folks at an upcoming event - share ideas, ask questions, and find potential search partners.
Most importantly, take action! Your MBA is a unique springboard for this journey. Use the resources, connections, and experiences available to you to confidently explore whether entrepreneurship through acquisition is your calling.
