Industries best suited for search funds?

searcher profile

April 28, 2022

by a searcher from United States Military Academy in Los Angeles, CA, USA

Which industries do searchers find the most success in as far as ROI when they exit? Are there certain industries that should absolutely be avoided? Would appreciate any thoughts from experienced searchers and search investors.

4
11
603
Replies
11
commentor profile
Reply by a searcher
from University of Virginia in Gaithersburg, MD, USA
I’m not an expert, but I listen to a lot of acquisition podcasts and read extensively on the subject. In my opinion, the answer can vary significantly from one searcher to another. Based on your specific circumstances, you might achieve a better ROI than another searcher. From what I gather, your ROI as a searcher depends on leveraging unfair advantages like industry expertise, unique skills, and strong network connections. Finding success also means identifying undervalued businesses, negotiating favorable terms, and performing thorough due diligence. Additionally, operational efficiency—streamlining processes, cutting costs, and implementing smart growth strategies—can significantly boost a business’s value.
commentor profile
Reply by a searcher
from Universidade de Coimbra in Coimbra, Portugal
IMO, all of the above are absolutely right. There are indeed some industries that are spot on for the SF model in terms of "recurrent revenues" & " "industry growth". In the other hand, if you identify a terrific great opportunity on a great business on a "non traditional" SF industry, you may have possible found a business that allow you a solid multiple on the exit. Look for the recurrent revenues, industry growth, company growth & a clear and solid MOAT.
commentor profile
+9 more replies.
Join the discussion