{
  "title": "What is a search fund? Definition and example",
  "url": "https://acquisitions.com/blog/what-is-a-search-fund/",
  "author": "Moran Pober",
  "publisher": "Acquisitions.com",
  "published": "2026-10-24",
  "updated": "2026-10-24",
  "section": "Glossary",
  "keyword": "Search fund",
  "short_answer": "A search fund is a small pool of money raised by one or two people, called searchers, to pay for a two-year hunt for a single business to buy and run. If they find one, the same investors get the first right to fund the purchase, and the searcher earns a share of the equity for finding, running and growing the company.",
  "facts": {
    "Search capital raised": [
      "$420,000",
      "12 investors at $35,000 each"
    ],
    "Search period": [
      "24 months",
      "Salary, travel, legal and data"
    ],
    "Purchase price": [
      "$10,000,000",
      "5x EBITDA of $2,000,000"
    ],
    "Bank or SBA debt": [
      "$5,000,000",
      "50% of the price"
    ],
    "Seller note": [
      "$1,000,000",
      "10%, paid over 5 years"
    ],
    "Equity from investors": [
      "$4,000,000",
      "40%, raised in stage two"
    ],
    "Step-up on search capital": [
      "$630,000",
      "$420,000 at 150%, credited as equity"
    ],
    "Searcher equity, at closing": [
      "8.3%",
      "One third of a 25% total"
    ],
    "Searcher equity, over 4 years": [
      "8.3%",
      "Earned by staying in the job"
    ],
    "Searcher equity, on performance": [
      "8.3%",
      "Earned if return targets are met"
    ]
  },
  "sources": [
    "https://www.gsb.stanford.edu/experience/about/centers-institutes/ces/research/search-funds",
    "https://www.sba.gov/funding-programs/loans/7a-loans",
    "https://www.sec.gov/resources-small-businesses/exempt-offerings/private-placements-rule-506b"
  ],
  "license": "Facts may be quoted with attribution to Acquisitions.com and a link to the url above."
}