Search fund opportunity in India - my 5 key takeaways

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September 02, 2019

by a searcher from Northwestern University - Kellogg School of Management in San Francisco, CA, USA

Total market-cap of the Indian family-owned companies is ~$800B. Many of these family owned small businesses can be a good target for acquisition via search fund model. The search fund opportunity in India is massive but also faces unique set of challenges. No MBA entrepreneur has succeeded in acquiring/exiting a business via search fund in India. I am sharing 5 key takeaways from my search fund research work in India during 2017 summer. #Searchfund #Entrepreneurship #India

https://www.linkedin.com/pulse/search-fund-opportunity-india-ashish-rohil/?trackingId=ov%2F05yE6Rh%2BppTuAQ3ruAA%3D%3D

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Reply by a searcher
in Washington, D.C., DC, USA
Thanks for sharing these insights! ^redacted‌ - Not only acquiring but also selling into SMB in India was quite difficult and has it's own lengthy process. Back in###-###-#### , when I was doing SunAlliance, I was selling clean energy to SMB businesses without the headache of 'upfront investment' but it was super difficult to (1) Find right POC, (2) Sell. Consultative sales approach did not help (in my personal journey).

I realized largely these deals worked out through close network or after recommendation - Having access to BNI helped to some extent.

However, as you pointed out - I still see huge opportunity in India. The family run-business are looking for exit, but there is no formal process for their exit journey. Do you know if there are any platform built for SMBs to sell their business -- So like MicroAcquire or Smobi type of Marketplace but India focused?
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Reply by a searcher
from Cornell University in Bengaluru, Karnataka, India
Very good article. I would like to add a point to debt financing. For a very long India did not have a dedicated bankruptcy law and a bankruptcy court. Over the last 24 months, these have been set up. Thus there is a chance that regulations on levered financing will open up in India in the near to mid future. Right not banks are saddled with nonperforming assets due to poor due diligence prior to lending. This has resulted in a decrease in the pace of credit growth despite very high deposit numbers. Certain banks have been prohibited from lending further until the NPA mess is over. Once the NPA issue is resolved, banks might be open levered lending
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