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In case you missed out on our last episode, please find it here.

Today’s Rundown

• Search fund bankruptcy

• Founding a holdco/rollup

• Choose the right investors

• 3 deal / launch announcement

• 8 new career opportunities (1 ETA opportunity!)

Database Overview

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• Preview search funds database

• Preview search fund investors database

Weekly Highlights

• Yale published a case study on exploring a search fund bankruptcy:

  • Search fund outcomes carry real downside risk: 37% of searchers never acquire a business, and among those who do, 31% result in partial or total equity loss

  • Duncan’s acquisition, F&M Tool & Die, looked stable on paper - $3.6M revenue and ~25% EBITDA margins - but revenue quickly dropped to $3M and EBITDA fell to low teens in year one, barely covering debt service

  • COVID-19 forced a 30% layoff in 2020, while steel prices later spiked 240% in 12 months, wiping out margins on long-cycle projects that had been quoted before the surge

  • Growth did occur - annualized bookings rose to $6M by 2022 with a $2.4M backlog - but profitability lagged; In 2023, the firm quoted $26M of work but booked only $2.8M, highlighting a massive conversion gap that drove cash crises

  • By 2024, revenue collapsed to $1M in the first half and just $10.7K in February 2025 before closure, demonstrating how quickly cash flow dependency, debt obligations, and vendor pressure can drive even seemingly recovered businesses into bankruptcy

• Entrepreneurial Capital, a fund of search funds, published interview notes with Peter Lang on founding a holdco & rollup with >20 acquisitions:

  • LinkedIn is an underused but highly effective channel for sourcing deals; credibility comes from demonstrating genuine industry knowledge, relevant experience, or investor backing in initial messages

  • Early conversations should focus on human connection, curiosity about the seller’s journey, and cultural fit rather than pushing for financial details or a quick deal

  • Using a detailed audit and “pre–due diligence” signals seriousness, differentiates you from less rigorous buyers, and ensures any LOI is based on real understanding of the business

  • Creative terms (e.g., seller notes, extended payment schedules) make it possible to meet sellers’ expectations while managing risk and returns

  • Tools like a shared risk register and phased diligence (high-, medium-, low-risk) help surface issues transparently, align buyer and seller, and create smoother post-close execution

• Grant Hensel, an experienced search fund investor, shared an article on why to make sure your investors are entrepreneurs:

  • Traditional private equity created value through financial engineering - buying low, adding debt, cutting costs, and exiting quickly - but often neglected the harder, longer work of building enduring businesses

  • Entrepreneurial investors bring operating experience, viewing companies not as spreadsheets but as dynamic, chaotic systems requiring tactical support, resilience in crises, and prioritization through firsthand knowledge

  • Culture is the most fragile and strategic asset in small and mid-sized businesses; while financial investors often erode it in pursuit of short-term metrics, entrepreneurial investors actively nurture it as the foundation for long-term success

  • The best investors preserve entrepreneurial joy by trusting operators, focusing on outcomes rather than micromanaging processes, and offering empathy rooted in their own operating scars when adversity strikes

Deal / Launch Announcements

• 🇩🇪 Antonius Salis and Thomas Wetzer launched Pina Capital, a founder-led investment firm focused on search funds and entrepreneurial acquisitions (link)

• 🇫🇷 Ghislaine El Alami launched Altera Transmission, a search fund focused on B2B services and niche industries (link)

• 🇳🇱 Philip Tulp and Michaël Bayer have launched Fonteyn Bedrijfsopvolging, a sector-agnostic search fund (link)

Career Opportunities

• [ETA - Job of the Week] Investment Associate | Tembo Search Partners | Frankfurt / Hamburg (apply)

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

• [PE] Investment Associate | CDPQ | London (apply)

• [PE] Investment Intern | Syngroh Capital | Frankfurt (apply)

• [PE] Investment Intern | Procuritas | Stockholm (apply)

• [PE Asset] (Senior) Corporate Development Manager | ZEAL Network | Hamburg (apply)

• [PE Asset] (Senior) M&A Manager | Vantis | Munich (apply)

• [PE Asset] M&A Manager | Banyan Software | Munich (apply)

_*Headhunter

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