Why Now Is the Perfect Time to Back a Search Fund Entrepreneur

Roger M.
Mar 15
4 min read

How Today’s Market Conditions, Structural Shifts, and Searcher Alignment Create a High-Conviction Opportunity for LPs

Timing matters in private markets. While traditional private equity firms navigate high valuations, exit gridlock, and growing skepticism over paper returns, search fund entrepreneurs offer LPs a focused, transparent, and DPI-driven alternative. In 2024 and beyond, the structural tailwinds behind Entrepreneurship Through Acquisition (ETA) are stronger than ever.

At Belegaer Capital, my search strategy is built to capitalize on this moment. This blog explains why now—amid market consolidation, generational succession, and investor reallocation toward high-DPI models—is the optimal time to back an operator-led acquisition. I outline the macro forces, investment thesis, and alignment mechanisms that make search funds uniquely attractive to limited partners today.

I. Search Funds: Performance That Outpaces Traditional PE

The Stanford 2024 Search Fund Study is unambiguous: the model delivers. Since 1984, search funds have produced a 35.1% IRR and a 4.5x ROI across 681 funds. Exited deals performed even better, posting a 42.9% IRR and a 6.6x ROI[^1^].

Unlike buyout funds, searchers target lower mid-market companies where operational improvements, not financial leverage, drive results. These companies are often overlooked by megafunds but are ideal for hands-on, skilled operators.

The secret? Alignment. Search fund entrepreneurs become full-time CEOs, owning both risk and reward. There are no management fees or blind pools. LPs know exactly what they’re backing, and when.

II. The 2024 Market Landscape: A Sweet Spot for ETA

The current PE environment offers a rare convergence of opportunity for ETA:

Valuation Reset: Stanford data shows median acquisition prices fell from $16.5M to $14.4M, and EBITDA multiples contracted to 7.0x[^1^]. Searchers can now enter at more favorable valuations.
DPI Takes Center Stage: McKinsey’s 2025 Private Markets Report shows LPs increasingly prioritize distributions (DPI) over paper IRR or TVPI. In fact, DPI is now 2.5x more important to LPs than three years ago[^2^].
Baby Boomer Exits: Over 50% of U.S. small business owners are aged 55+, creating a multi-trillion-dollar opportunity in succession planning.

Mid-Market Fragmentation: Thousands of profitable, founder-led companies generate $1M–15M EBITDA and seek a capable successor—a perfect fit for searchers.

III. Search Funds Are Gaining Global Traction

The IESE 2024 International Search Fund report confirms this isn’t just a U.S. trend. International search funds have:

Launched in 40+ countries
Achieved a 79% acquisition success rate (vs. 63% in North America)
Delivered an 18.1% IRR and 2.0x ROI globally

Search funds are thriving in Europe, LATAM, and Asia. My search strategy at Belegaer Capital includes sourcing from these geographies, where lower multiples and less competition offer a pricing advantage[^3^].

IV. What LPs Get With a Search Fund Investment

Backing a searcher offers LPs:

Transparency: See the deal, team, and thesis before you commit capital
Governance: Board rights, reporting access, and influence over strategy
Co-Investment Rights: Flexibility to size up your investment on a per-deal basis
Operational Alpha: Returns come from execution, not financial engineering
High-DPI Exposure: Cash returned sooner, tied to one performing company

Search funds are one of the only PE models that consistently reward LPs with direct

distributions, rather than waiting 10+ years for fund wind-downs.

V. Why I’m Raising Now

I bring 15+ years of global marketing, growth strategy, and operational turnaround experience to the table. I’ve helped scale brands in SaaS, healthtech, services, and compliance—industries where search funds thrive.

At Belegaer Capital, I’m seeking to acquire a company with the following characteristics:

$1M–10M EBITDA
Recurring or repeat revenue
High customer retention
Clear founder succession path
Under-optimized sales or tech stack

My edge comes from what I’ll do post-close: modernize RevOps, unlock digital growth, and lead with strategic clarity.

VI. What LPs Gain by Investing With Me

Search Capital Participation: Typically $25k–50k per LP in the search phase
Acquisition Equity: Deal-by-deal capital deployment with pro-rata rights
Access: Direct line to the CEO, real-time updates, and visibility into operations
Governance: Participation in board or advisory roles as desired

This is not a fund. You are not committing to a 10-year blind pool. You are backing an entrepreneur, a plan, and a single company.

VII. Why Search Funds De-Risk the Investment

McKinsey noted in 2025 that PE continues to grapple with high entry valuations and illiquid assets. In contrast, search funds reduce risk through:

Low purchase multiples (typically 5-7x EBITDA)
Full diligence prior to LP commitment
Operator alignment (CEO is majority equity holder)
Transparent investment structure with board governance

This means better downside protection, with upside driven by execution rather than market beta.

VIII. The Transformation Playbook

Research from IESE and TTCER Partners shows the most successful search fund deals share one thing: transformation.

In a study of 25 high-performing companies, TTCER found:

90% had near-death experiences early on
60% of CEO time was spent on sales in the first 24 months
18.1x of MOIC came from topline growth[^4^]

This reinforces a simple fact: execution > arbitrage. I am betting on customer value, GTM optimization, and leadership, not financial re-engineering.

IX. The Window Is Now

With deal multiples down, succession supply up, and LPs seeking real liquidity, there has never been a better time to back a search fund entrepreneur.

The numbers speak for themselves:

42.9% IRR on exited deals (Stanford)
79% acquisition success rate globally (IESE)
2.5x greater LP focus on DPI (McKinsey)

You can wait for the next fund cycle—or you can partner directly with an operator, now.

Conclusion: A High-Conviction Moment for LPs

Search funds offer a rare combination of transparency, alignment, and performance. As a solo entrepreneur backed by Belegaer Capital, I am committing my full career to finding, acquiring, and transforming one great company.

For LPs who want more than exposure—those who want access, impact, and real distributions—this is the time to act.

Let’s build something enduring. Together.

References

Kelly, P., & Heston, S. (2024). 2024 Search Fund Study. Stanford Graduate School of Business. https://www.gsb.stanford.edu/faculty-research/centers-initiatives/ces/research/search-funds
Edlich, A., Croke, C., Dahlqvist, F., & Teichner, W. (2025). Global Private Markets Report 2025: Private Equity Emerging from the Fog. McKinsey & Company. https://www.mckinsey.com
Kowalewski, A.-S., Kelly, P., Simon, J., & Johnson, R. (2024). International Search Funds 2024. IESE Business School. https://www.iese.edu/entrepreneurship/search-funds
Rosenthal, S., & Simon, J. (2024). Search Fund Transformations: A Path to Excellence. IESE Business School. https://www.iese.edu