Niche or Broad? Advice from Experienced Searchers

searcher profile

March 21, 2025

by a searcher from University of Toronto in Toronto, ON, Canada

Hey everyone! I’m new to the search fund scene but have consulted in manufacturing, travel/transportation, banking, and insurance. I’m torn between specializing in one sector or staying broad and letting the best opportunity emerge. Specializing might help build deeper networks and spot hidden gems, but staying flexible could uncover unexpected—and sometimes better—deals.

If you’ve tried one approach or both, what did you learn, and what would you do differently? Is there any data suggesting one path is more successful, or does it all come down to personal preference and luck?

Thanks in advance for sharing your thoughts!

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commentor profile
Reply by an intermediary
from The University of Chicago in Chicago, IL, USA
1) Search broad, buy Niche
2) First broad, then narrow to Niche,

Coming out of ETA or corporate management, most people have less than zero buying experience. So, in the early phase, focus on learning the acquisition process and the give and take. Then narrow it down to niche. I know of many buyers who found the niche business early, but did not know how to makes an offer, how to "read" the seller, how to stay focused on building and maintaining chemistry, how to pace/adjust the discovery to seller and his/her advisors, how to overcome objections, how to live with limited information, etc.

When I taught at Kellogg, I told the class, buying is like going on a date (i learned this form a very successful buyer of mine, whose acquisition is taught in B-schools as a case study). Everyone has an idea of the ideal partner, but in the beginning, you cast a broad net, then you become more selective. Most advisors, including schools, tell you what to do once you get on the alter, but not how to get there.

One more thing. In my 35 years, I have represented many buyers. All of them bought a business they were comfortable with, but all of them also said after the purchase, "they did not know such business existed".
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Reply by a professional
from Mount Allison University in Calgary, AB, Canada
Niching down doesn't mean you won't look at other opportunities, but it certainly helps to have a focus. Sell-side advisors appreciate a focused approach and it will help you gain more credibility to communicate with confidence and clarity. You can change your approach over time so don't feel like it's a concrete decision. You mention manufacturing and transportation are areas of experience for you. You could try to get more specific in each of these and give examples. Once you arrive at your search criteria statement, pass it by some other searchers or advisors to test their feedback and help you further refine.
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