Proprietary search needed?
Are traditional search fund investors okay investing if you source your businesses from marketplaces or through brokers. Their fee is not an issue? Does it need to be proprietary?
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by a searcher
from Georgetown University - The McDonough School of Business
in Washington, DC, USA
in Washington, DC, USA
2yrs ago
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by an investor
2yrs ago
from University of California, Berkeley in San Francisco Bay Area, CA, USA
from University of California, Berkeley in San Francisco Bay Area, CA, USA
It is not necessarily needed, but any brokered deal will attract 100+ players with committed capital. This usually means that you will lose high qualify deals because you can't compete with the search fund model. If you do get it under LOI despite the PE competition, it is likely that you are either overpaying or you missed something and your investors will not close. This is why proprietary search is likely a better use of your time for funded search.
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by an intermediary
6mos ago
from Duke University in Denver, CO, USA
from Duke University in Denver, CO, USA
You want to do both a brokered search and proprietary search at the same time. Proprietary search is administratively burdensome and takes time, but can yield great results. Don't convince yourself only to do a brokered search because it is easier, your competition will be significantly higher.
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