Typical Terms for a Search fund

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April 24, 2022

by a searcher from University of Virginia-Darden - Darden School of Business in Hong Kong

Hi All,

I have previously done a self-funded search and successfully closed a buy-in. I am looking to learn how a searchfund works as I am incubating a few ventures and being requested to support some searches. Appreciate any sources or tips. Some questions on my mind.

1. What all the fund covers in terms of costs/expenses?

2. What's the typical duration of a searchfund?

3. Is the founder/entrepreneur expected to contribute? How much?

4. Does the founder/entrepreneur draw a salary from the fund? How much?

5. Where can I get any standard termsheet or agreement templates?

6. Any other important things to know?

Thanks all!

-Naresh

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Reply by a searcher
from Northwestern University in Chicago, IL, USA
The best primer on the topic is from Stanford: https://www.gsb.stanford.edu/experience/about/centers-institutes/ces/research/search-funds/primer (and the answer to all your questions is it depends)
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Reply by a searcher
from Columbia University in Saratoga, CA, USA
I downloaded the Stanford doc. it is great. thanks
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