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Today’s Rundown

• General Catalyst’s roll-up strategy

• Small-/Mid-cap outlook in Germany

• Pioneering search fund entrepreneurs in Poland

• 3 deal announcements (3 search fund launches!)

• 8 career opportunities

Database Overview

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Weekly Highlights

• Marc Bhargava, partner at venture capital firm General Catalyst, joined CNBC for an interview on their roll-up strategy within the Creation Fund:

  • General Catalyst recently raised an $8 billion fund, with approximately $1.5–2.5 billion allocated to its Creation Fund - a vehicle designed to take a distinctive approach within the venture capital landscape

  • Traditionally, venture capital firms invest in startups during their early stages - often prior to achieving profitability - and support them through to an eventual exit, typically via an IPO

  • However, the Creation Fund employs a fundamentally different model:

    • General Catalyst typically incubates a technology- and/or AI-enabled software company, partnering with seasoned, repeat entrepreneurs

    • Rather than pursuing a conventional go-to-market strategy and relying solely on organic growth, which can be both time-consuming and capital-intensive, the fund supports growth through inorganic expansion

    • This approach involves using the incubated software company as a platform, executing a buy-and-build strategy to acquire incumbent players along the value chain - from distributors to end customers

    • Following each acquisition, the platform’s proprietary software or AI capabilities are integrated into the acquired businesses

  • This strategy has shown measurable impact: post-acquisition, companies have seen margin improvements exceeding 10% due to the deployment of the enabling technology

  • Initially, the Creation Fund finances acquisitions through equity, deliberately avoiding leverage in the early stages; once the platform achieves sufficient scale and operational stability, debt financing becomes a viable tool to further accelerate growth

  • The long-term vision is to build category-defining companies capable of delivering power-law returns through IPOs - akin to the trajectory of firms such as Constellation Software

• M&A Review published an outlook on the small- and mid-cap market in Germany:

  • After a difficult year in 2024, the outlook for 2025 shows cautious optimism for Germany’s small- and mid-cap private equity market, with opportunities driven by digitalization, business transformation, and succession in family-owned companies

  • Improved financing conditions and strong investor interest in technology, software, and healthcare are expected to support deal activity

  • Industrial sectors like automotive will be approached more selectively due to ongoing uncertainties

  • One of the main challenges remains the valuation gap between buyers and sellers, prompting private equity firms to use creative deal structures such as earn-outs, seller loans, and staggered payments to close transactions

  • Political developments following Germany’s 2025 elections will significantly impact the investment environment, with potential reforms like the Zukunftsfinanzierungsgesetz II and WIN initiative offering regulatory relief and improved capital access for SMEs

  • Overall, the German Mittelstand continues to offer resilient, long-term investment opportunities, but success in 2025 will depend on flexibility, strategic focus, and the ability to navigate market and policy uncertainty

• Moonbase Capital, a fund of search funds, shared a new edition of their Search Fund Squared series, spotlighting the co-founders of Lynx Trail Capital, a Poland-based search fund:

  • Constantin Marek and Michał Kamiński co-founded Lynx Trail Capital, becoming pioneers of the search fund model in Poland by targeting the country’s strong SME sector and emerging succession opportunities

  • They chose the ETA model over launching a startup because it allows them to apply their diverse expertise to real, established businesses while managing risk and focusing on long-term value creation

  • Poland offers strong potential for search funds, particularly in tech-enabled services and B2B SaaS, but presents challenges such as limited seller readiness, complex debt financing for asset-light businesses, and unique local deal structures

  • Their search focuses on companies with €2–5 million in EBITDA, high margins, recurring revenues, and scalable business models - businesses they believe can grow significantly with the right leadership and resources

  • They advise future searchers in Poland to deeply understand the local market, build strong investor relationships, and leverage personal networks to increase credibility and access to quality acquisition targets

Deal Announcements

• 🇨🇭 Luca Hany launched Amboro Capital, a search fund focused on B2B companies (link)

• 🇮🇹 Francesco Valli launched Nostos Capital, a sector-agnostic search fund (link)

• 🇫🇷 Sebastien Vuillod launched Soclofi, a sector-agnostic search fund (link)

Career Opportunities

• [PE-Asset] Group CFO | Camino Search | Munich (apply)*

• [PE-Asset] CFO | Stanton House | London (apply)*

• [PE-Asset] M&A Manager | CorpFin Search | Hamburg (apply)*

• [PE] Investment Associate | PER | London (apply)*

• [PE] Investment Analyst | Flex Capital | Berlin (apply)

• [PE] Investment Analyst | Giano Capital | Milan (apply)

• [PE] Investment Analyst | Hostinger | Vilnius (apply)

• [PE] M&A/Private Equity Intern (Search Fund) | Funke Unternehmensnachfolge | Berlin (apply)

_*Headhunter

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