Top 20 Search Fund Investors (And What You Need to Know)
Learn how top search fund investors think, what they look for, and how to raise capital—plus see the most active firms backing ETA deals today.
Posted October 31, 2025
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Table of Contents
Suppose you're an aspiring entrepreneur exploring entrepreneurship through acquisition. In that case, there's a high chance you've come across the search fund model, a unique investment vehicle where entrepreneurs raise capital to acquire and operate a single business. However, while the model is gaining popularity, breaking into the search fund community and attracting the right search fund investors is far from simple.
This guide breaks down everything you need to know, how the model works, what top investors look for, and how to position yourself as a strong operator.
Read: Search Funds: The Ultimate Guide
What Is a Search Fund?
A search fund is a structured approach where entrepreneurs, often post-MBA, raise initial funds to cover the "search phase," where they source and evaluate potential target companies to acquire. Once they identify a viable medium-sized business, they raise additional equity capital to finance the acquisition and take an active role in managing day-to-day operations.
There are two primary types:
Traditional search funds, which are backed upfront by seasoned investors, and self-funded search funds, where the entrepreneur personally finances the search, gaining more control and a larger ownership stake
Read: How to Start a Search Fund — The Ultimate Guide
Why Investors Love the Search Fund Model
The search fund model offers investors a rare opportunity to support entrepreneurs on a direct path to business ownership and long-term growth. Unlike traditional private markets where capital is often pooled passively, this model allows investors to play an active role: mentoring operators, influencing strategy, and shaping the future of an acquired company.
With the right partner, the upside potential is significant, especially in lower middle market sectors like healthcare services, B2B services, and niche manufacturing, where operational improvements can unlock major value.
From the Reddit thread, several experienced business leaders noted that the hardest part isn’t raising acquisition capital, it’s sourcing a truly great business. That’s where due diligence, operational skill, and grit separate successful searchers from the rest.
Read: Search Fund Financing: The Different Types & What to Know
Top 20 Search Fund Investors to Know
These investment firms, family offices, and individual investors are some of the most active in the private equity-like ETA space:
- Pacific Lake Partners – Industry leader with a hands-on model; known for deep support, operator coaching, and early conviction in search funds. Backed 100+ entrepreneurs.
- Broadtree Partners – Long-term partner that co-invests and co-operates with searchers. Often embeds operators into existing platforms; not a pure-play funder.
- Anacapa Partners – One of the earliest institutional search fund investors. Focused solely on search. Strong reputation for follow-on capital and board support.
- Relay Investments – Actively mentors searchers pre- and post-close. Offers operational support, succession planning insight, and a collaborative community.
- Search Fund Partners – Led by ex-searchers. Emphasizes mentorship and long-term alignment. Often involved in governance and strategic planning post-acquisition.
- Next Coast ETA – Hybrid model supporting both traditional and self-funded searchers. Offers capital, deal sourcing help, and executive recruiting post-close.
- ETA Equity – Emerging investor with growing deal volume. Supports first-time operators and helps with deal diligence and lender introductions.
- Peterson Partners – Strong brand in the mid-market. Supports entrepreneurial acquisitions through flexible capital and strategic relationships.
- Red Forest Capital – Quiet but respected investor focused on backing first-time searchers with clear theses and operational potential.
- The Nashton Company – Prioritizes fit between searcher and business. Looks for gritty, execution-focused operators and stays involved post-close.
- The Cambria Group – Invests across the lower middle market. Occasionally backs searchers where the acquisition fits existing portfolio themes.
- TD Investments – Flexible capital provider for ETA. Participates in both pre-search funding and direct acquisitions; prefers B2B services and legacy businesses.
- Futaleufu Partners – Focuses on long-hold ETA plays. Selective investor with emphasis on capital preservation, operator trust, and succession-led deals.
- Marion Equity – Small team of operator-investors. Works closely with searchers throughout search and operating phases. May co-invest across deals.
- Liberty Partners – Family office capital with interest in succession deals. Less active, but known to back promising solo searchers with roll-up potential.
- TTCER Partners – Highly focused on long-term alignment. Offers post-close operating insight and occasional access to industry advisors.
- Aspect Investors – Backs early-stage entrepreneurs in ETA and growth platforms. Known for giving autonomy to operator-CEOs.
- Housatonic Partners – Veteran firm with broad ETA experience. Strong track record with both solo searchers and acquisition entrepreneurs in tech and services.
- Milk Street Ventures – Mission-driven investor focused on value creation in overlooked industries. Backs both traditional and self-funded searches.
- M2O Search – A Unique platform that combines capital with executive search services. Helps match operators with target companies and succession candidates.
What Search Fund Investors Look For
Raising capital in the search fund world is about convincing experienced investors (many of whom also back independent sponsors) that you have the mindset, skillset, and staying power to lead a business through uncertainty, growth, and long-term value creation.
Search fund investors evaluate you much like they would an independent sponsor, looking for judgment, resilience, and a repeatable framework for sourcing and operating deals. Here’s what matters most:
1. Proven (or Projected) Operational Grit
Search fund investors aren’t just backing your ability to source a deal; they’re backing you to run a real, often messy, small business. That means leading teams, fixing broken processes, managing P&Ls, and making tough calls daily. If you haven’t held an operational role before, show that you’ve built systems, led projects, or solved problems under pressure.
Bonus: Share examples of how you’ve responded to setbacks. Investors want to know how you’ll lead when things go sideways.
Expert tip: Highlight situations where you led people, not just PowerPoints. And if you’re light on ops experience, consider partnering with a co-founder who has it.
2. Founder-Investor Fit and Long-Term Alignment
Most search fund investors are former operators themselves; they’ve sat in your seat. They’re looking for entrepreneurs who see this as more than a financial arbitrage. That means showing authentic commitment to long-term business ownership, cultural stewardship, and real value creation, not just a 5-year IRR.
Be clear about your "why," what kind of company culture you want to build, and how you define success beyond the exit. Investors want someone who will lead with integrity, not just close a deal.
Expert tip: In your outreach and pitch calls, ask thoughtful questions about how investors work with searchers post-close. It shows you’re thinking long-term.
3. A Focused, Credible Industry Thesis
Top investors want to back searchers who understand what makes a business durable and can articulate a clear, compelling thesis around the kinds of portfolio companies they’re targeting. This means choosing industries that are:
- Fragmented and founder-owned
- Growing or recession-resistant
- Asset-light with recurring revenue
- Often overlooked by larger private equity
Healthcare services, specialty B2B services, facility maintenance, govcon, and niche manufacturing are perennially strong sectors, but investors want to see your unique edge in sourcing, evaluating, and operating within that space.
Expert tip: Share a sample deal you've researched (even if you didn’t pursue it). Walk through the key metrics, risks, and why it fits your thesis. This builds trust and credibility fast.
How to Raise Capital for Your Search Fund (Step-by-Step)
| Step | What to Do | Expert Insight |
|---|---|---|
| 1. Define Your Search Thesis | Identify the type of business you want to buy: size, industry, revenue/EBITDA profile, geography, and ownership type (e.g., retiring founder). | Your thesis should be both credible and focused. Investors want to know why you’re the right person to search in this space. Tie it to your background or network where possible. Most successful acquisitions are boring, stable, cash-flowing businesses, not flashy startups. |
| 2. Build a Targeted Investor List | Research and shortlist investors who are active in search funds and ETA. Start with the top 20 (see table above), then leverage warm intros, school alumni, and operator networks. | Segment your list into: anchor investors (write bigger checks), value-add advisors (industry/ops expertise), and supporting LPs. Prioritize those aligned with your geography, deal size, and stage (traditional vs. self-funded). Use LinkedIn, Searchfunder, and community Slack groups to find intros. |
| 3. Craft a Best-in-Class Investor Deck | Your investor deck should clearly communicate: Your background and track record. Your search thesis and sourcing strategy. How you’ll assess and structure deals. Your operations and value-creation plan. Risk factors and your mitigation strategy. | Investors aren’t expecting you to have all the answers, but they want to see rigor, realism, and leadership potential. Bonus points for including a sample deal (even a fake one) to show your thinking. Keep it short, focused, and professional. 12–15 slides are ideal. |
| 4. Pitch, Close, and Build Momentum | Set up initial intro calls with top investors. Use feedback from early conversations to refine your deck. Try to lock in “soft commits” before launching a full raise. | Many searchers raise from 10–20 backers at $10K–$50K each. From the Reddit thread, alumni and prior operators are often your most accessible and responsive early investors. Be ready to answer tough questions about your own ops chops, sourcing discipline, and worst-case scenarios. |
How Self-Funded Searchers Can Compete and Win
While traditional search funds often rely on a predefined pool of investors, a growing number of search fund entrepreneurs are choosing the self-funded route, and many are finding just as much success, if not more.
These operators are often former consultants, bankers, or business school grads who use their own savings to fund the search phase, then raise just capital (and sometimes mentorship) at the acquisition stage.
Why Searchers Go the Self-Funded Route
Pros:
- Greater ownership and long-term upside
- Full control over your industry focus, deal partner, and acquired company
- More flexibility in timeline, geography, and acquisition criteria
Cons:
- Higher personal risk, especially if your search drags out
- You’ll need to personally fund travel, tools, outreach, and due diligence
- Less structured support (though many coaches and informal advisors can help)
Reddit Insights: Real Advice from Searchers in the Trenches
Reddit’s MBA and ETA communities have surfaced some consistent wisdom from real operators who’ve gone the self-funded path:
- “It’s not hard to raise a search fund out of HBS or GSB. The hard part is finding a great business.”
- “Most investors are alumni or former search fund entrepreneurs themselves.”
- “You don’t need a search fund internship. Better to build ops or consulting experience and network with searchers.”
- “Consider a co-founder if you lack operational experience. Two heads are often better.”
Many self-funded searchers found that using personal funds to reach LOI gave them more leverage both with sellers and with investors. Once the acquired company was identified and de-risked, raising additional capital became far easier. It’s less about selling a vision and more about showing a real, successful business in the making.
What Makes a Search Fund Succeed
- A focused, disciplined search phase
- Targeting small businesses with succession issues
- Strong team and leadership alignment
- Ability to operate, not just acquire
- Clear plan for improving process, culture, and value
Use your unique blend of skills (finance, strategy, and execution) to lead a successful acquisition and drive results for your stakeholders.
Closing Thoughts: Is a Search Fund Right for You?
Pursuing a search fund can be the most rewarding path to business ownership, but it’s not for the faint of heart. It requires relentless hustle, operational resilience, and the ability to lead with confidence.
Whether you're raising from top search fund investors, going self-funded, or exploring both, your strategy should reflect your focus, strengths, and vision for success.
If you want expert help from someone who’s done it before, find a search fund coach here. They can help you raise funds, build your investor pipeline, and prepare to lead a company.
You can also access our proven cold outreach templates, tested and refined by successful Leland applicants.
- The Ultimate Cold Outreach Template
- Cold Outreach Template
- Email and LinkedIn Networking Templates for Outreach
Read next:
- Search Fund vs. Private Equity: Differences & What to Know
- Search Fund vs. Venture Capital: How to Know Which One is Right for You
- Understanding Traditional Search Fund And How It Differs From Self-Funded Search
- Independent Sponsor vs. Traditional Search Fund: Differences & What to Know
- The Top 10 Search Fund Accelerators (2025)
- List of Top Search Funds (2025-2026)
FAQs
What is the average size of a search fund acquisition?
- Most ETA deals target medium-sized enterprises valued between $5M and $30M, depending on the industry and growth profile.
Can I do a search fund without an MBA?
- Yes, though an MBA from a top program helps with credibility and access to capital. Self-funded searchers often come from finance or consulting backgrounds.
How do search funds differ from private equity?
- Search funds focus on one single business, with the operator taking an active role. PE firms manage portfolios and often install external CEOs.
What’s the biggest risk in a search fund?
- Buying the wrong company. That’s why strong due diligence, a clear investment thesis, and operational expertise are key.
Can I do a search fund if I don’t have a finance background?”
- Absolutely, while a finance or consulting background helps, it’s not required. What matters most to investors is your ability to lead, problem-solve, and operate a business. Many successful search fund entrepreneurs come from product, engineering, military, or general management roles. If you can show strong leadership skills, a clear acquisition thesis, and a plan to surround yourself with the right advisors or co-founder, you can absolutely succeed in ETA.
