Minimum number of companies needed for a searchfund funnel?

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July 18, 2019

by a searcher from INSEAD in Salzburg, Austria

People talk about using the search fund model is a numbers game.
200 e-mails a week and 20 calls a week with potential target accounts.
Let's say we do this for 50 weeks, then this is 1,000 companies that fulfill the search criteria.

I am in a market and have search criteria that might only result in###-###-#### targets.

What's your view on the mimum numbers needed to make the funnel work? (still using a process approach and ignoring lucky punches).

Thanks!

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Reply by a searcher
from University of Wisconsin in Chicago, IL, USA
I think it depends your model, what you are looking for, who are your partners and network (including referrals), and your approach and what qualifies to get into the "funnel". I can show you 50,000 generally small bad businesses just by pointing you to a couple of websites. And you would look for 30 seconds at most of them and say, no, no, no. and so on. Ray Allen (purest jump shooter in modern day) gave an interview where they asked about his preparation shooting and there are players that now claim they shoot 1,000 (or more) jump shots every day. Ray Allen said, I used to take about 100, but they were realistic to a game situation. He'd be doing it off the dribble, have a hand in his face, etc. not just standing wide open at the top of the key (a very easy shot that you will almost never see in a professional game). Ray also said, if you show me a shooter taking 1,000 shots per day, I can show you a shooter taking a lot of bad and easy shots.

A search fund is trying to find a spouse, not just have a bunch of dates - so you are looking for one, just ONE. And a broad funnel isn't as good as one that has a high quality filter and sourcing plan. Think of your network and partners as helpers, almost like family could serve someone in an arranged marriage. You have the freedom to date and look online, go to bars, join clubs, etc find your own spouse - but if your mentor and someone you held in the highest regard said, I know you and I know this business and you are perfect together - wouldn't that be better than you having a funnel of 2,000 contact points in one year?
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Reply by a searcher
from University of Virginia in Richmond, VA, USA
The sizes of the wider parts of the funnel aren’t nearly as important as putting up offers. Multiple offers per week is the way to go.
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