Navigating the Lack of Operational Experience as a Searcher

searcher profile

May 09, 2024

by a searcher from Lafayette College in New Jersey, USA

Searchfunder Community,

How do sellers, brokers, investors and lenders view a searcher's lack of direct operational experience and what are ways that you've seen searchers effectively communicate how they can overcome that?

I have been in investment banking for ~10 years helping lower-middle market companies sell and raise debt and/or equity capital. Presumably there are others with similar M&A or deal advisory and consulting backgrounds that have had to navigate this question and communicate why they believe they are motivated and capable of making the leap to acquiring, operating and building a small business.

I'd be interested in discussing. Please feel free to send me a direct message to connect. Thanks


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Reply by a searcher
from Bowling Green State University in Surrey, BC, Canada
Based on your background, you likely have a pretty good understanding of many industries - that's the headline. Under the headline, there's (assuming) a life-long learner with the grit, tenacity, and energy to figure it out. Admit you don't know everything but frame it as a positive - you'll work with the employees to build better, you'll bring in expertise for support, you'll bring fresh eyes and fresh perspective, etc. I'm guessing most owner-managers who started these businesses didn't know all that much when they started - maybe they'll see themselves in you.

On an industry by industry basis, you could outline what steps you would take to get up to speed. Maybe you have a soft circle of Advisors with operational experience to help guide you post-close - ie. HR, Accounting, Admin, Marketing.
And remember to talk the talk - if you've seen a bunch of industrial manufacturing businesses through your sell-side days, use the lingo when you're talking to a broker about the industrial manufacturer they're repping. Or, if it's food manufacturing, or whatever. It goes a long way imho.
commentor profile
Reply by a lender
from University of Michigan in Indianapolis, IN, USA
Hi Rob. You might consider starting smaller ($2MM in Sr debt instead of $5MM-$8MM) or purchase 90% of the company to ensure current owner is around for long post close transitional assistance or bring 1 or 2 key employees into minority ownership interest in your newco (2-3%) Sr. VP of Operations, Sr. VP of finance, or Sales as examples. Lastly, most lenders will have a higher bar for certain industries like manufacturing or construction.
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