This is a subscriber-only article.

For a limited time, join Entrepreneur+ and save 50% during our Cyber Monday sale. Use code SAVE50.

Join Now

Already have an account?

Sign in
Entrepreneur Plus - Short White
For Subscribers

Search Funds: A Financing Option for Business Buyers Search funds seek out opportunities to acquire.

By Gwen Moran

Opinions expressed by Entrepreneur contributors are their own.

When Jim Southern wanted to buy a company in the 1980s, he didn't use his savings or look for loans. Instead, he sought investors for a search fund--a pool of money that helps aspiring entrepreneurs find viable businesses to acquire. Southern ultimately purchased a printing company that he held for approximately 10 years before selling it.

Today, Southern is founder of Pacific Lake Partners, a San Francisco firm that helps entrepreneurs acquire businesses using a two-stage search-fund model: providing money for the search, then assisting with the acquisition. Pacific Lake typically works with recent business school graduates, making available, along with other investors, up to $500,000 to help them find the right opportunity. Once a business is located--usually one in the $10 million to $30 million range--the firm will provide up to $2 million for the purchase.

"The typical search-fund entrepreneur has chosen his investors well," Southern says. "He doesn't have the money himself, but he does have a stable of investors who have been communicating with him for up to two years during the search."

Editor's Pick

Related Topics

Growing a Business

More Than 90% of Startups Don't Make It. This CEO Reveals What It Takes to Not Only Survive — But Thrive.

Learn what it takes to grow a company while also scaling as a leader.

Business Plans

She Wrote An 'Escape Plan' to Quit Her Job and Move to an Island. Now She's There Generating Nearly $300,000 A Year

"My detailed, step-by-step plan on how I would quit my job and move to a Caribbean island."

Business News

Apple Moves to Sever Ties With Goldman Sachs — Here's What That Means for Apple Card and Savings Holders

The end may be near for one of the most prominent alliances between a technology firm and a banking institution.

Business News

Mark Cuban Is Reportedly Selling the Dallas Mavericks to Another Billionaire

Cuban purchased a majority stake in the NBA team in 2000 for $285 million.

Starting a Business

How Business Community Is Making CEO Life Less Ghastly

People are starting to notice that if you want to get the best out of entrepreneurs, you have to support them. But how?

Marketing

5 Scrappy Ways to Create Quick Marketing Wins

Marketers are under pressure to create both short-term and long-term successes. Here's how you can create quick wins easily alongside your bigger strategy.