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 (see links below). CES has identified and tracked more than 400 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 2020 CES analysis of 401 qualifying search funds (linked below) found the aggregate pre-tax internal rate of return to be 32.6%, and the aggregate pre-tax return on invested capital to be 5.5x.

Upcoming Event
Tuesday, Dec 14, 2021 – Wednesday, Dec 15, 2021
On Campus

The Search Fund CEO Conference will include speakers, investor meetings and networking opportunities for search fund CEOs and frequent investors.

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.

2020 Search Fund Study: Selected Observations

Peter Kelly, Sara Heston
The 2020 Search Fund Study reports on the financial returns and key qualities of search funds formed in the United States and Canada since 1984. This…
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.”

Related Faculty

Search Fund Studies

Articles on the Search Fund 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