Search Fund
Definition
A search fund is a vehicle through which one entrepreneur, often a recent MBA, raises money from investors to find, buy, and personally run a single small company. It is private equity at its smallest scale: one buyer, one business, one CEO seat.
In practice
The model, born at Stanford in the 1980s, has produced consistently strong returns by buying stable, boring businesses at modest multiples and giving them energetic full-time leadership. It has become the standard on-ramp for would-be owner-operators who lack capital.