My personal findings - Joshua Starke, Founder & Managing Director @ Starke Unternehmensnachfolge

When I decided to raise a search fund, I thought I had a fairly clear picture of what fundraising would look like. I had seen the decks, spoken to dozens of searchers, and worked through the typical reading list (two must-reads: Search Funds & Entrepreneurial Acquisitions by Jan Simon and Buy Then Build by Walker Deibel).

On paper, it felt like a pretty straightforward process: build a Private Placement Memorandum (PPM), approach investors, secure commitments, and close the round. In reality, it felt much more like a test of clarity, discipline, and self-awareness than a pure fundraising exercise.

Looking back, a few lessons learned made all the difference. Not in theory, but in the actual day-to-day of raising capital and building the right investor group for the journey ahead.

At the beginning, I treated the PPM as something I needed to complete before I could properly start fundraising. In hindsight, writing it was the most valuable part of the entire process. It forced me to structure my thoughts and clarify my real motivation, the type of business I want to own, and what success in this journey would actually look like for me. In that sense, the PPM became much more than a pitchdeck. It became a structured reflection exercise that turned an abstract ambition into a concrete, investable story.

Investors can tell very quickly whether you’ve done your homework. If you haven't, the conversations stay superficial. If you have, your narrative becomes sharper, your conviction becomes more credible, and your answers become much more grounded.

My biggest takeaway here is simple: Don’t start fundraising when your PPM is finished. Start when your thinking is. 

At first, I thought fundraising meant talking to as many investors as possible. Over time, I realized the opposite is true and that selectivity matters more than volume. It’s about choosing the right investors, not maximizing conversations.

I became more deliberate in thinking about who I actually wanted on my cap table. Not just in terms of capital, but in terms of experience, mindset, and how they could contribute over time. In a search fund, investors often play an active role as sparring partners, board members, and long-term supporters.

Your investors become long-term partners, so it’s worth designing that group intentionally from day one. Thinking about this early helped me prioritize conversations more intentionally. If I were to do it again, I would spend even more time upfront defining what “the right investor” really means for me.

What made the biggest difference in investor conversations wasn’t the pitch itself, but the level of preparation and depth of thinking behind it. The more I had thought through my search strategy, clarified my acquisition criteria, stress-tested my assumptions, and anticipated the key questions, the more natural and credible the conversations became.

You don’t need to have perfect answers. But you do need to show that you’ve done the work. Investors have seen dozens of searchers and quickly sense whether you are reacting in the moment or speaking from a well-prepared, structured point of view. In my experience, preparation is what turns a good conversation into a serious one.

4. Show up in person

Some of my most meaningful conversations only happened once I met investors face-to-face. Traveling to meet them, making the effort, and sitting across the table signals commitment in a way no Teams or Zoom call can fully replace. 

In an investment process like search funds, where investors are ultimately backing a person even more than a plan, being in the same room matters disproportionately. It allows you to convey energy, conviction, and commitment through presence, body language, and genuine interaction. At the same time, it shows that you are willing to go the extra mile, that you truly value the relationship, and that you are approaching this as a long-term partnership, not just a transactional ask.

One of the most underestimated dynamics in fundraising is momentum. Investors rarely decide in isolation. They look for signals. Who else is in? Are credible investors already backing this journey? Is the round progressing? Is this person building traction? 

The hard part is that, at the beginning, there is no momentum. You have to create it. 

What helped me most was starting with highly credible local investors, securing early commitments, and then consistently updating other potential investors on progress and new commitments. Simple updates such as having added a respected investor, reaching a certain percentage of the round, or moving closer to closing helped build confidence and momentum. Once it’s there, the process starts to accelerate.

6. Don’t reinvent the model

The search fund model is highly standardized for a reason. There is already a well-understood framework around economics, vesting, governance, and legal documentation. The more I leaned into that standardization, the smoother the fundraising process became. Sticking to established terms, working with ecosystem-experienced lawyers, and relying on proven legal documentation reduced friction significantly. 

This was an important lesson for me because the entrepreneurial instinct is often to improve, tailor, or optimize. In this context, that instinct can be counterproductive. Trying to reinvent the model rarely makes you look innovative. More often, it just slows the process down.

7. Be intentional about your cap table

One of the most underrated decisions is how to shape your investor group. More investors don’t automatically mean a better outcome, there are real trade-offs between diversification and engagement.

Over time, I came to appreciate that the composition of the cap table matters just as much as the capital itself. Each investor brings not only funding, but also perspective, expectations, and potential involvement over a long period of time.

I found the right balance around approximately 10 to max. 15 investors, enough to secure sufficient capital, but small enough to ensure real involvement, alignment, and long-term support.

Going into fundraising, I thought of it as a phase to “get through” so I could start the real work. I don’t think that anymore. Fundraising is the beginning of the journey. It shapes your thinking, your investor base, and the quality of the long-term support system around you.

In many ways, the strength of the search fund model lies exactly in that combination. Data from studies such as the annual Stanford Search Fund Primer (highly recommended read) consistently shows strong outcomes of search funds over time. According to the 2024 edition, around 63% of searchers successfully acquire a company, and around 11% of those even generate ROIs exceeding 10x.

In my view, these results are not coincidental. They are closely linked to the consistency of the model and, even more importantly, to the quality and supportiveness of the investor group built during the fundraising process.

Ultimately, raising a search fund is less about convincing investors and more about bringing together the right group of long-term partners who share your values, believe in your journey, and are the right fit for the road ahead.

Enterprise software is facing its biggest narrative reset in a decade.

Steve Burn-Murdoch spent months talking to hundreds of investors and executives in software businesses and shared a sharp framework in our latest newsletter. Here the recap:

For ETA specifically, the opportunity in vertical SME software with deep customer embeddedness has arguably never been better priced, but the framework for what to avoid is just as important as what to buy.

Full piece by Steve Burn-Murdoch. Link 

𝗔𝗿𝘁𝗲𝗺𝗶𝗱𝗲 𝗖𝗮𝗽𝗶𝘁𝗮𝗹 𝗣𝗮𝗿𝘁𝗻𝗲𝗿𝘀 - 𝗜𝗧 

Valentina Molinari and Francesca Zanetti launched Artemide Capital Partners, the first Italian search fund founded by an all-female duo. Drawing on 15+ years in Luxury, Retail and Beauty, they are targeting a Centro-Nord Italian SME with €10-40M revenue and EBITDA above 15%. The fund closed its first fundraising round at €640K. Link

𝗧𝗲𝘀𝗲𝗹𝗮 𝗖𝗮𝗽𝗶𝘁𝗮𝗹 - 𝗘𝗦 

Juan Rshaid and Jaime Huerga launched Tesela Capital, a sector-agnostic search fund targeting the acquisition and long-term management of a Spanish SME. Link

𝗣𝗲𝗮𝗸 𝗣𝗮𝗿𝘁𝗻𝗲𝗿 𝗖𝗮𝗽𝗶𝘁𝗮𝗹 - 𝗚𝗕 

Barnaby Lewis launched Peak Partner Capital, a sector-agnostic search fund focused on UK SME acquisition. Link

𝗘𝘁𝗿𝘂𝘀 𝗖𝗮𝗽𝗶𝘁𝗮𝗹 - 𝗜𝗧 

William Hillgarth launched Etrus Capital, a search fund dedicated to acquiring and providing long-term management to a single Italian SME. The fund completed its fundraising in a matter of weeks, and is focused on B2B services. Link

𝗔𝗽𝗶𝗮𝗻𝗮 𝗣𝗮𝗿𝘁𝗻𝗲𝗿𝘀 - 𝗚𝗕 

Johnny Sleeman, following several years in the Army and consulting, launched Apiana Partners after completing his fundraising. The fund is focused on UK SMEs in the aerospace, defence and security sectors. Link

How Steve Carroll Built a $1.2B HVAC Roll-Up in 5 Years (Acquiring Minds Podcast)

Steve Carroll originally planned to buy a single small business with SBA debt and operate it for steady cash flow, but after early operational strain and limited growth, he pivoted into building Kelso Industries, a $1.2B+ commercial HVAC and MEP platform completed through 30+ acquisitions in just five years. He shares how partnering with private equity unlocked acquisition speed, why requiring sellers to roll 20–40% equity kept operators motivated, and how a decentralized model, leaving local leadership in place instead of forcing integration, enabled scale while preserving culture and margins. The big shift: moving from “buy a job” to designing a system for compounding growth.

Link

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