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- Buy & Build Europe #45
Buy & Build Europe #45
Your Weekly <5 Minute Update of ETA, Search Funds, HoldCos
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Today’s Rundown
Two- and three-tier incentives structure models
What to do between signing and closing
Silent succession crisis in DACH
Importance of cultural due diligence
2 deal / launch announcements
6 new career opportunities
Database Overview
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Weekly Highlights
Daniel Perthes, an investment manager at evolutiq, shared this thoughts on search fund incentive structures: two-tier and three-tier models:
European search funds are shifting from a traditional three-tiered equity model to a simpler two-tiered structure due to taxation issues
In the three-tier model, searchers earn equity across acquisition, time-based, and performance tranches, each representing roughly one-third of total ownership
The new two-tier model allocates 50% of equity at acquisition and 50% through combined performance and time-based vesting, contingent on staying until exit
Both models maintain independent tranche vesting, include accelerated vesting at strong returns (around 2.5× MOIC), and may later shift from IRR to MOIC milestones
The overarching goal of both structures is to align incentives among searchers, investors, and the company to drive sustained growth and returns
Ben Kelly, an experienced entrepreneur that acquired & scaled 6 businesses, published a post on what to do during the 30-60 days between signing and closing:
The 30–60 days between LOI and closing are crucial - this transition period determines whether you start strong or face chaos post-acquisition
Priority #1: Complete due diligence - verify financials, management, and contracts; identify any red flags that may justify renegotiation or walking away
Priority #2: Build key relationships early - have the seller introduce you to major vendors and customers to maintain trust, pricing, and continuity after ownership transfer
Plan your first 90 days but avoid executing changes yet - outline meetings, system reviews, and your introduction strategy while the seller still manages the business
Jointly prepare your Day 1 announcement - coordinate with the seller on how you’ll present yourself to employees, customers, and vendors, as this communication sets the tone for your ownership
Orbit, a law practice, and bunch, a platform that is building the backbone of private markets, published a white paper on transforming the silent succession crisis on the DACH SMEs:
Search funds are emerging as a solution to Germany’s SME succession gap, with growing recognition of their potential to sustain the Mittelstand as many founders near retirement
Institutional support is still limited, but collaboration among founders, investors, and universities could make search funds a mainstream alternative for succession in the DACH region
Successful implementation requires active, hands-on investors, not just financiers - those who can combine deal experience with sensitivity to family business dynamics
From a fund-of-funds perspective, search funds offer private-equity-like returns with lower cyclicality, since value creation comes from operational improvement rather than financial leverage
Platforms and networks (e.g., bunch) are helping reduce regulatory friction and share best practices, positioning search funds as “patient succession capital” that both preserves industrial heritage and provides strong, risk-adjusted returns
Simone Vascotto, Founder of Humanaq.com, shared his opinion on culture due diligence: measuring what makes deals work:
Cultural Due Diligence identifies the “tribal knowledge” and behavioral dynamics within companies that often determine whether acquisitions succeed post-closing
Historically overlooked due to high cost, limited expertise, and invasive data collection, Cultural Due Diligence is now gaining traction thanks to AI and NLP tools that make culture measurable at scale
NLP-based analysis extracts behavioral patterns from natural language to assess fit, friction, and succession risk in just days, reducing bias and improving insight
Cultural Due Diligence provides specific value for family offices, search funds, and strategic buyers by predicting human friction, safeguarding legacy, and guiding integration or automation efforts
In modern M&A, culture is no longer optional - Cultural Due Diligence complements financial and legal diligence by revealing how people actually decide, adapt, and lead, protecting long-term value
Deal / Launch Announcements
Career Opportunities
[PE-Asset] M&A Manager | Dartmouth Partners | Munich (apply)*
[PE] Value Creation Professional | Asset Partners | London (apply)
[PE] Investment Associate | Trill Impact | Sweden / Copenhagen (apply)
[PE] Investment Associate | ACL Partners | Munich (apply)*
[PE] Investment Associate | PER | Munich (apply)*
[PE] Investment Analyst | PER | London (apply)*
*Headhunter
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