My personal findings - Massimo Mazzoli, ETA Analyst & Researcher

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This article builds on the research I conducted for my Master’s thesis in Management Engineering (Finance) at Politecnico di Milano, titled “Exploring ETA as a Hybrid Path between Entrepreneurship and Private Equity: Insights from the Italian Ecosystem.” Over the past year, I have analysed the Italian ETA landscape in depth, co-authoring the first structured mapping of the market and expanding it through extensive primary research.

The analysis covers 41 ETA vehicles (59 operators) active in Italy as of November 2025 and combines 24 quantitative questionnaires, 30 in-depth interviews with searchers, and 15 interviews with investors and other ecosystem stakeholders.

As part of the analysis relies on qualitative interviews and questionnaires, certain insights reflect practitioner perspectives. The available dataset varies across metrics, as not all respondents provided complete information. Findings should therefore be interpreted as indicative of structural patterns rather than statistically comprehensive.

Key Takeaways

Growth Without Infrastructure

Since the launch of the first Italian search fund in 2016, Italy’s ETA market has expanded from 8 vehicles in 2021 to 40 by the end of 2025, a +400% increase in four years. Eighteen acquisitions have been completed and one exit recorded. IIn addition, the acquisition success rate, defined as launched searches resulting in completed acquisitions, stands at 95%, well above the global benchmark of 79%. While this partly reflects the positive momentum of a still early-stage market, it also highlights the strong structural fit between the ETA model and Italy's SME landscape.

The primary engine behind Italian ETA expansion has been model diffusion through higher education, particularly MBA programs. Roughly half of interviewed searchers first encountered ETA during their MBA.

The result is a searcher base that is professionally trained and predominantly drawn from consulting, investment banking, or general management backgrounds, typically launching at a median age of 34. 

In other words, talent quality is not the constraint. What Italy lacks, relative to more mature European markets, is a dense institutional structure. Growth has largely been supply-driven by capable operators, while the supporting infrastructure has not scaled at the same pace.

The Capital Dynamic: Abundant but International

Italy is not capital-starved. Median search capital raised stands at €580K, median fundraising duration is approximately three months, which is below global benchmark, and recent rounds are frequently oversubscribed. The key distinction, therefore, is not capital availability but its origin: 71% of search capital comes from outside Italy.

This points to a domestic institutional gap rather than a funding shortage. Capital itself becomes commoditised, and differentiation shifts toward judgement, depth of network, and hands-on support.

A Market Built on Succession

Italy’s SME landscape is structurally well aligned with ETA. Among the 18 completed acquisitions mapped, 92% cited succession as the primary sale driver, with median target metrics of €10.5M in revenue, €2.3M in EBITDA, and a 23% margin. Median leverage stands at approximately 50%, equity rollovers are present in 89% of transactions, vendor loans in 66%, and sellers remain involved post-acquisition in 61% of cases. 

These are not distressed assets, but generational transitions. Alignment mechanisms at closing are strong, with sellers frequently retaining economic or operational involvement to reinforce continuity. 

The structural fit between Italian SMEs and the search fund model is therefore both clear and compelling.

Where Risk Actually Concentrates

In Italy, sourcing is demanding but ultimately mechanical: median outreach reaches around 1,200 contacts per search, the average positive response rate stands at 12.3%, and roughly three LOIs are issued, a disciplined numbers game. The real risk, however, does not lie in the outreach funnel but in transition. Operators consistently report that post-acquisition challenges are primarily relational and organisational, including resistance to change, informal processes, founder-centric cultures, and people-management complexity. 

Those who perform best tend to adopt a cautious, observation-driven, trust-first approach in the early months. Financial structuring rarely determines the outcome; transition execution does.

Bottom Line

The operators are there, the succession pressure is real, and international capital is already active. What will ultimately differentiate outcomes is not access to funding, but the ability to provide governance depth, transition discipline and long-term partnership in a market where infrastructure is still being built.

The Women's Search Network's 2025 Study tracking 171 women across the ETA ecosystem confirms that female searchers perform broadly in line with the general search population. But three details are worth flagging.

Focused searches are becoming the norm. 75% of women who launched in 2023-2024 ran a geography or industry-focused search, up from 56% pre-2023. As deal competition increases, a tight thesis is shifting from a differentiator to a baseline requirement.

Sales remains the most underestimated skill. 38% of the 2021-2025 cohort named it, consistent with what the Stanford study shows broadly. ETA preparation still underweights it relative to finance and diligence.

Europe is the fastest-growing international market for women in search. Those entering now are building the playbook in real time, higher execution risk, but less competition and more receptive sellers in succession-driven markets.

The broader signal: operator diversity in ETA is becoming a data-backed investment thesis, not a niche conversation.

Reference: Women's Search Network, Women in Search Funds 2025 Study

𝗡𝗲𝗽𝗵𝗼𝘀 𝗖𝗮𝗽𝗶𝘁𝗮𝗹 - 𝗜𝗧 

Alberto Di Gennaro has launched Nephos Capital, a search fund targeting the acquisition and operational management of a single Italian SME. The fund is backed by a group of Italian and international investors. The searcher brings 15 years of experience across General Electric, McKinsey, and Salesforce in Italy and the UK. Link

𝗖𝗼𝗻𝘁𝗶𝗻𝘂𝘂𝗺 𝗖𝗮𝗽𝗶𝘁𝗮𝗹 - 𝗣𝗧 

Continuum Capital, a Portugal-focused search fund co-founded by Thomas Schlingensiepen and João von Funcke, has completed its fundraising. The fund has assembled a diverse investor base spanning institutional and private backers across multiple geographies. Link

𝗣𝗵𝗶𝗹𝗶𝗽𝗽 𝘃𝗼𝗻 𝗕𝘂𝗹𝗼𝘄 @ 𝗧𝗲𝗺𝗯𝗼 𝗦𝗲𝗮𝗿𝗰𝗵 𝗣𝗮𝗿𝘁𝗻𝗲𝗿𝘀 - 𝗗𝗘 

Philipp von Bülow has joined Tembo Search Partners as a new searcher, targeting mid-sized B2B companies in Northern Germany. His focus spans legal tech, compliance, cybersecurity, and software-based niche providers in regulated markets. He previously built and sold lawpilots, a SaaS business, to FLEX Capital. Link

David (operator of a $23M/month air filter business) breaks down which “boring businesses” are actually worth buying versus the ones that destroy capital. Drawing on direct acquisition experience, he argues that many popular entry points (e-commerce, agencies, laundromats, weak franchises) are structurally fragile due to customer churn, lack of differentiation, and dependence on volatile inputs like ads or key relationships.

Instead, he emphasizes businesses with recurring, unavoidable demand and real customer stickiness, particularly local B2B and service models tied to compliance or urgency (e.g., refrigeration, grease traps, inspections). He also highlights how obvious opportunities are often priced efficiently or acquired by private equity, making overlooked, operationally complex niches more attractive.

The big shift: treat ETA as a durability game, prioritizing businesses with predictable cash flow, defensibility, and minimal reinvestment needs over “easy” or trendy models.

Link

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