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Today’s Rundown

• Self-funded search terms

• Blueprint for committed-capital holdco

• Building a career through the search fund model

• 3 deal / launch announcements

• 6 new career opportunities

Database Overview

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Weekly Highlights

• Grant Hensel, Managing Partner of Entrepreneurial Capital, published a guidance on investor terms that are now (mostly) standard for self-funded search deals:

  • Investors typically underwrite self-funded search deals with ~5% annual revenue growth, flat margins, and an exit at the entry multiple 7–10 years out - generally requiring a modeled IRR of 30–35%

  • Market-standard preferred returns fall in the 10–15% range, often accruing rather than paid in cash, giving searchers early-year flexibility while compensating investors for illiquidity

  • Distribution waterfalls return accrued preferred, then invested capital, before shifting to a pro-rata split that usually delivers 60–80% of ongoing economics to the searcher once capital is returned

  • Step-Up mechanics (commonly 2.0–2.5x) translate investor dollars into proportionate ownership while still granting searchers the majority stake despite contributing a minority of the equity

• Richard Augustyn, an experienced investor and entrepreneur, shared a blueprint for ETA entrepreneurs: building a committed-capital holdco:

  • Public-market serial acquirers like Lifco, Röko, Addtech, Indutrade, Lagercrantz, and Constellation show that a committed-capital HoldCo can compound for decades by repeatedly buying “ideal search-fund-like” businesses

  • Targets should have sticky, repeat/recurring, workflow-embedded sales supported by switching costs - mirroring Constellation’s core screen and Stanford’s top-quartile pattern

  • Structural tailwinds are a quantified edge as niches are benefiting from digitization, regulation, aging demographics, outsourcing, automation, or sustainability, raising the probability of outsized outcomes, consistent with Stanford’s finding that industry growth correlates with returns

  • Examples include: Lifco has compounded EBITA ~18% annually since 2006, kept 20%+ EBITA margins, and scaled to >SEK 150B market cap by 2025; Constellation has grown revenue ~20% CAGR with ~20–30% EBITDA margins and delivered ~100x–200x shareholder returns; Indutrade has grown EBITA ~15% annually for 15+ years

  • Execution rules are simple but strict:

    • Start with 1–2 early deals then systemize before scaling

    • Keep HQ lean (often ≤20 people even at multi-billion scale)

    • Integrate lightly to preserve autonomy

    • Avoid common failure modes like scaling too fast, bloating overhead, or making one early “fatal” acquisition mistake

    • A quick diagnostic is that ≥60–80% revenue should repeat annually, margins be 15–30% with <5% capex

• aulium published a new podcast episode with Henrik Buehler on building a career through the search fund model:

  • Henrik argues seller choice in European lower mid-market M&A is heavily emotional, citing ~50% of B2B and ~95% of consumer buying decisions driven by emotions, and says this equally applies to succession deals

  • H&B Mittelstandspartner runs a traditional (funded) search: raise ~2 years of search capital, acquire one SME, operate it hands-on, and deliver a liquidity event via sale or investor buyout

  • Globally, search funds have scaled to ~1,000 raised since the 1980s, with reported average outcomes around ~35% IRR and ~4.5x MoM; ~650 are in North America and ~350 international, mostly Europe

  • Europe’s ecosystem is growing fast: Spain is the biggest hub (driven by IESE/ESADE), Germany has roughly ~20–30 active searchers, and most targets are sized at ~€1–4M EBITDA, though recent German deals have reached ~€8–10M EBITDA amid ~€1.2T PE dry powder pushing size upward

  • H&B’s target profile is quantitatively conservative: repeat/recurring or mission-critical B2B revenues, EBITDA margins ideally ≥15%, reasonable CapEx, and an entry multiple low enough to allow multiple arbitrage, which makes high-multiple SaaS less attractive despite subscription revenue

Deal / Launch Announcements

• 🇩🇪 Michael Roecker launched Linta Partners, a search fund investor (link)

• 🇪🇸 Zita Saurel launched Celium Capital, a search fund investor (link)

• 🇮🇹 Francesco Contento and Daniele Zagnoni launched Vitis Capital, a search fund focused on ICT & Technology, High-end Luxury goods and Precision Manufacturing (link)

Career Opportunities

• [PE] Investment Associate | CorpFin Search | Hamburg (apply)*

• [PE] Investment Intern | GENUI | Hamburg (apply)

• [PE-Asset] CEO | CorpFin Search | Paris (apply)*

• [PE-Asset] Head of M&A | CorpFin Search | Passau (apply)

• [PE-Asset] Head of M&A | CorpFin Search | Neu-Isenburg (apply)

• [PE-Asset] M&A Manager | PER | Germany (apply)*

_*Headhunter

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