Going Self-Funded: What are the main reasons why?

May 08, 2019

by an investor from Harvard University - Harvard Business School in San Francisco, CA, USA

Interested in learning from the community why more and more searchers are going down the self-funded path!

Thanks,

Greg

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Reply by a searcher
from The University of Michigan in 1075 Gills Dr, Orlando, FL 32824, USA

I imagine there is a direct correlation with self funding a search and where in their career the individual is when they start the search. If self funding is indeed becoming more prevalent then I would suspect there are more people starting the search later in their career like myself. Personally there were a couple main factors in why I chose to self fund. First, I have a strong desire to be my own boss and in my conversations with searchers before starting my search, I continually heard from funded searchers that they did not feel like they were truly their own boss. Second, the terms tend to be more favorable for self funded searchers and since I could afford to fund the search I didn't see a compelling reason to raise search capital.

Reply by a professional
from Harvard University in Boston, MA, USA

Hey Greg, having done both a funded and self funded search (in that order), I'll compare our decision process. The primary rationale for starting with a funded search was we didn't have deal experience and we wanted vested and aligned investors/advisors in our camp at each stage. As for the selecting a self funded search the second time, we were interested in building a portfolio (not just one deal). We also wanted the flexibility to be more opportunistic than a funded search would allow (eg: smaller deals, wider range of target industries, structuring deal/terms to fit the opportunity).. But would also echo the points raised by Kevin and Zack.

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