"Why Many Entrepreneurs Are Turning to a ‘Search-Fund’ Model," a recently published article in D Magazine, familarizes novices with the concept of entrepreneurship through acquisition. The article details Simone and Malcolm Collins, a young married couple who recently raised $600K to conduct a search for a small business to acquire.
"Also known as “entrepreneurship through acquisition,” the relatively new but increasingly popular business model involves raising a pool of capital from investors in order to locate and acquire an existing, privately held company."
"Last spring... the couple was able to secure $600,000 from 17 investors for the search part of their quest, which could last as long as two years. Once they identify a company to buy—they’re looking now at targets with $5 million to $50 million in annual revenue, in a variety of industries—their investors will serve as advisers and have first-refusal rights to pony up the cash required to make the acquisition."
"Last May, for one example, Irving-based HousingWire, a media company specializing in the housing industry, was acquired by a search fund called Riomar Capital."
Read Glenn Hunter's full article in D Magazine.
Equire is a marketplace for entrepreneurs to find and invest in traditional SMB's with $700k to $7m EBITDA. The Equire DealSource service helps Entrepreneurs find companies to acquire and operate, and the Equire DealFund service then helps entrepreneurs efficiently obtain capital from accredited investors to close their acquisition. For more information please visit equire.co or email firstname.lastname@example.org.