“This is why I believe I will be a good CEO and partner, and why I think you should invest in my fund.” You don’t often hear phrases like this coming from current and recently graduated MBAs, but at the Chicago Booth Search Fund Investor Summit that’s exactly what you can expect. On Wednesday, April 19th in the Gleacher Center, investors from across the country gathered at the Gleacher Center to listen to the principals of four Booth search funds deliver their pitch to raise capital and begin their “search.”
Dating back to 1984, the search fund model was pioneered by graduates of the Stanford Graduate School of Business as a new path to Entrepreneurship Through Acquisition (ETA). A subset of private equity, a search fund is committed, private capital that funds an entrepreneur’s search for an attractive existing business with the intention of acquiring and running the company. Searches typically last anywhere between 6 and 24 months and target companies with between between $5-$50M in revenue. Over the last few years, searches have increased in popularity as a viable career path for MBAs.
This marked the third year that Chicago Booth has hosted a search fund investor summit and it is still the only business school in the nation to put on such an event. In 2016, four Chicago Booth teams received an aggregate of $1.5M+ in search capital funding, secured from over 30 investors. This year, four teams presented to and fielded questions from a panel of more than 25 individual and institutional investors as they sought to raise between $350,000 to $750,000 for their funds. The teams were Sri Bodapati (‘17) with Silver Chariot Capital, Rob Joyce (‘16) with Arbor Hill Capital, Michael Tadros (‘17) with Trailview Partners, and Dave Bochetto (‘17) and Josh Weiss (‘17) with NEX Management. The searchers provided details on their background and career experiences, explained what drew them to the search fund model, why they thought they would be good CEOs, and even highlighted some initial industries they found as potential target areas for their search. After the summit, the teams were able to engage with the investors more directly during a private networking reception.
The summit is also a fitting culmination of sorts - the final big event sponsored by Chicago Booth and the Polsky Center for Entrepreneurship and Innovation after a full year’s programming of conferences, lunch and learns, newsletters, and podcasts. The Booth-Kellogg ETA Conference last November drew a crowd of 400 investors, students, and searchers eager to learn and connect with others in the ETA community. Another contributor to the further development of the ETA ecosystem at Booth is the Entrepreneurship Through Acquisition course taught by adjunct professors Brian O’Connor (‘08) and Mark Agnew (‘06). In fact, most of the investor summit participants this year and in the previous two years committed themselves to pursuing the ETA path after taking O’Connor’s and Agnew’s highly popular course.
If you’re interested in learning more about search funds and other ETA models, feel free to reach out to the Co-Chairs of the Search Fund group: Tim Mendoza, (firstname.lastname@example.org), Sebastian Perez-Restrepo (email@example.com), and Yang Zheng (firstname.lastname@example.org).