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Today’s Rundown

• Interview with a search fund investor

• Searchers vs private equity

• Why working capital matters

• 2 deal / launch announcements

• 5 new career opportunities

Weekly Highlights

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

  • Grant Hensel started 10 companies (7 failed, 2 sold, 1 scaled to ~60–65 employees), bought a business his wife now runs, and raised ~$11M for Entrepreneurial Capital to back self-funded searchers buying at ~3–5× earnings

  • In their own acquisition, they went to LOI 4 times (3 accepted, 2 collapsed due to issues like miscounting debt as revenue) and implemented EOS post-close with a weekly scorecard of ~7–12 metrics owned by leaders

  • The fund targets “cockroach” businesses with ≥$750K pre-tax earnings, low customer concentration/capex/cyclicality and a profitability history, aiming to pay 3–5× and under standard self-funded terms models a ~30% investor IRR even at ~5% revenue growth with no margin or multiple expansion

  • Pre-fund, Hensel made 11 personal investments; now the fund plans 13–18 deals over 2–3 years (~6/year), sees ~1 under-LOI deal per business day (~250/year), and aims for roughly one close every other month

  • Sourcing is community-driven (e.g., a webinar drew ~160 searchers; the “This Week in ETA” newsletter has 1,000+ subscribers), the raise ran ~5 months from Feb–Jul 2025 with early encouragers ultimately ~3% of capital

• Evermark shared their opinion on search funds vs private equity: where first-time buyers win in 2025:

  • In 2025, search fund buyers are gaining ground on private equity as sellers prioritize stewardship, legacy, and cultural continuity over pure financial engineering—searchers win not by outbidding, but by aligning with what sellers truly value

  • Market data shows search funds thriving in the $1–3M EBITDA range (≈98% of searcher intent) where PE rarely competes, while Stanford’s 2024 study reports 35.1% median IRR for search funds vs. ~13.5% forecasted PE returns, with 63% acquisition rates and median deal sizes of $14.4M

  • Sellers’ skepticism toward first-time buyers centers on seriousness, deal team strength, funding certainty, and post-close readiness—credible searchers counter this with recognized advisors, customized structures, and visible market presence

  • Structurally, PE deals standardize and plan exits in 5–7 years, while searchers craft earnouts, advisory roles, and governance protections that preserve founder legacy—custom over efficiency wins succession-driven transactions

  • With institutional deal velocity slowing, 2025 favors hands-on operator-owners who build trust, show liquidity readiness, and focus on relationship-driven, founder-aligned acquisitions rather than trying to “out-PE” private equity

• Pioneer Capital Advisory shared a buy-side briefing on why working capital matters:

  • Working capital is the key determinant of survival in the first 90–180 days post-close—paying payroll before A/R arrives, meeting vendor terms, and avoiding cash-driven decisions even when the P&L is profitable

  • Define it precisely as current assets (cash + A/R + inventory) − current liabilities (A/P + accrued + short-term debt) and lock a normalized NWC “peg” in the purchase agreement with $-for-$ price adjustments if the seller delivers less

  • Size the buffer quantitatively: if forecasts call for $300k but the seller leaves $150k, finance the $150k gap; as a rule of thumb, hold 3–6 months of operating expenses in liquidity—e.g., for $500k annual opex, keep $125k–$250k accessible on day one.

  • Don’t stop at the minimum 10% equity—an extra $50k–$100k of buyer cash reduces early-payroll/ inventory stress and signals discipline

Deal / Launch Announcements

• 🇪🇸 Terra Firma Capital, a search fund managed by Marc Giné, has acquired HVAC businesses Airnou and Termotur and merged them into Nextclima Group (link)

• 🇬🇧 Eyal Kaplan, a NCA-backed searcher, has acquired Paul Mathew Transport, a logistics and warehousing firm (link)

Career Opportunities

• [PE] Investment Manager | Max Valier Holding | Munich (apply)

• [PE] Investment Manager | Privatal | Berlin (apply)*

• [PE-Asset] Senior Investment Manager | Viessmann Generations Group | Munich (apply)

• [PE-Asset] M&A Manager | Vidia Equity | Bremen (apply)

• [PE-Asset] Portfolio Manager | Flex Capital | Berlin (apply)

_*Headhunter

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