MBO as an Alternative to a Typical Search Fund Acquisition?

We all know the classic search fund model: acquire a company, transition leadership, and scale. But what if, instead of acquiring a controlling stake upfront, you enter as a CEO, gradually earning equity through performance-based vesting and personal/3rd party investment—aligning incentives while ensuring continuity for a retiring founder? In other words, a structured Management Buyout model designed for founder-led businesses that haven’t been fully professionalized / ready to be sold, providing a clear path to majority ownership over time. Some key elements: CEO starts with a minority stake via phantom shares or RSUs, with vesting tied to performance Founder gradually steps back (with optional earn-out or retained stake???). Predefined call option for the CEO to acquire majority control after a few years at a transparent valuation. While this isn’t a traditional search fund play, it could address common challenges: founder resistance to an immediate sale; difficulty in financing a large acquisition upfront; better alignment of incentives over time; CEO receives a good salary while understanding and operating the business—potentially more effective than a typical pre-acquisition DD. Has anyone structured or analyzed a similar model? What are the biggest risks you’d foresee? Curious to hear thoughts on potential pitfalls, financing challenges, and governance considerations from this community.