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Today’s Rundown

• Insights of a investor in self-funded searchers

• How to build a 20m MSP

• Good will in search funds

• Flood of capital creates a search fund bubble

• 3 deal / launch announcements

• 10 new career opportunities

Weekly Highlights

• HoldCo Builders Podcast published a new podcast episode with Grant Hensel, a search fund investor, who raised $11.7m to back 13 self-funded searchers:

  • Buy where you already have edge and avoid “buying a job”, especially in agencies unless you have deep model expertise

  • Operator quality trumps all, with the best signal being on-site, relationship-driven diligence grounded in day-to-day reality

  • Target “cockroach businesses” with low customer concentration, low capex, low cyclicality, real profit history, recurring revenue, and no single-point failures

  • In the first 60–90 days, use a simple operating cadence but stay embedded with the team and customers before making changes

  • Prefer single acquisitions at 3–5× earnings with conservative growth and distributable cash over rollups that rely on reinvestment and multiple expansion, while acting as a supportive partner and sourcing via community

• MSP Owner published a new podcast episode with Jake Levine on building a $20m MSP (IT Services):

  • As of Dec 2024, Robo is a ~$20M revenue MSP with ~60 employees and two offices (Austin, TX and Vancouver, WA)

  • Entry was via a search-fund platform in Austin, followed by a Pacific Northwest add-on (~$6M revenue, ~20–22 techs, ~25 staff), sourced through relationships that began with a cold email and a neighbor intro

  • The platform deal took ~12+ months to close due to founder time constraints and messy accounting; post-close revealed deep key-man risk that caused some churn and required deliberate customer-relationship resets

  • Early integration philosophy was “do no harm”: migrate systems quickly but defer rebranding to preserve SEO (kept “Computers Made Easy” powered by Robo), resulting in a roughly year-long integration

  • Operational fixes centered on building AM/VCIO cadence (QBRs) and formal 24/7 triage - which cut ~⅔ of after-hours requests - while planning for 3–4× growth and a potential investor liquidity event in 3–5 years

• Richard Augustyn, founder of search fun investor Endurance Search Partners, shared his view on good will hunting - the central task in search fund acquisitions:

  • In most search acquisitions, goodwill is the largest balance-sheet asset, so target stable, reputation-driven markets with recurring needs where trust can endure

  • Durable goodwill shows up in metrics: consistent revenue and cash flow, recurring/re-occurring revenue, low churn/high repeat business, and diversified customers with no single client >25%

  • Favor models that institutionalize trust - mission-critical services, contracts/licenses/certifications, and a brand/reputation that persists beyond the owner

  • Ensure goodwill transfers via a structured transition with seller endorsement, pre-close trust building, and retention of key managers and staff

  • Goodwill must fit the new CEO: cultures that accept a first-time leader who can earn trust and carry the seller’s legacy are far likelier to sustain the asset

• Caprae Capital Partners, a search fund investor, shared their view on the search fund bubble: why the flood of new capital is a warning sign, not a celebration:

  • A flood of capital has turned search funds into a bubble, with too much money chasing too few truly high-quality SMBs

  • An excess of searchers over sellers creates hyper-competitive auctions and “deal fever”, amplified by 18–24 month search clocks

  • Winning bids (e.g., paying ~7×) plus formulaic 100-day plans often destroy key-employee relationships and culture, revealing finance acumen ≠ operating skill

  • Post-close success depends on humility, trust-building, and gritty operating capability - traits seldom tested in bidding frenzies

  • The disciplined edge is patience and the conviction to walk away, backing rare true operators over dealmakers before the bubble inevitably pops

Deal / Launch Announcements

• 🇬🇧 Melda Eren launched Perennia Capital, a search fund focused on B2B services companies with mission-critical offerings (link)

• 🇳🇱 Niels Siskens launched 7mills, a sector-agnostic search fund (link)

• 🇮🇹 Guido Emanuele Fucci launched Vela Equity Partners, a sector-agnostic search fund (link)

Career Opportunities

• Investment Analyst / Associate | PER | Munich (apply)*

• Investment Analyst | Generis Capital Partners | Paris (apply)

• Investment Analyst | Stepstone | London (apply)

• Summer Analyst | Stepstone | London (apply)

• Investment Intern | Blackstone | London (apply)

• Investment Intern | Triton | Frankfurt (apply)

• Investment Intern | Triton | Milan (apply)

• Investment Intern | HF Equity | Hannover (apply)

• Investment Intern | Gilde Healthcare | Utrecht (apply)

• [PE Asset] Corporate Development and M&A Manager | PER | Frankfurt (apply)*

_*Headhunter

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