What does the data say about MBAs and search funds? What about veterans? How do these two groups actually perform with investor capital? I see a lot of folks in the ETA/search crowd question the norm of investing in post-MBAs for a search fund. What have they done as an entrepreneur? Why would they do well of they have never run a business? Why should a retiring owner trust this young'n to steward their legacy? On the surface, all sounds right. But what does the data say? Earlier this year, Yale SOM published a study (A.J. Wasserstein, one of the big names in the ETA world, is an author) "A Detailed Analysis of ETA CEO Demographics and Financial Outcomes" Daniel Lazier, Jacob Thomas, A. J. Wasserstein Here is what they found: MBA vs. Non-MBA 1. IRR MBAs: 28% median IRR, 22% mean Non-MBAs: 1% median, -28% mean 2. In the non-MBA group, entire bottom quartile went to zero. Total loss of capital. 3. Non-MBA results were far more scattered. MBAs had better risk-adjusted profile. 4. School didn't matter as much as people like to think. HBS and GSB had median 22% IRR, everyone else: 30%. --- Veteran-led funds 1. IRR Median: 35% vs 24% for non-veterans Mean: 28% vs. 17% for non-veterans 2. Veterans were the ONLY demographic that never posted a total loss. 3. Veterans had the tightest return distribution: 33% standard deviation vs. 51% for non-veterans. 4. Veterans did underperform on MOIC, slightly. 3.7x mean for veterans vs. 4.2x for non-veterans One thing to note: authors stared that they never looked at MBA+veteran to see how that combo performed. --- This is not meant to be a credentialism post. Our investors like the Military-> MBA profile because it shows someone who had been through multiple professional "filters" and it signals someone who is hungry and ambitious. And the data does tend to be favorable for that profile.