Self-funded search with Europe as a geographical focus?

January 08, 2020

by a searcher from INSEAD in Sydney NSW, Australia

Hi All,

I plan to launch my self-funded search in 2021 and my geographical focus will be Central/Western, Southern and Northern Europe as I am relatively indifferent with regard to where in these regions I live/settle down. I currently live in Sydney, Australia but because my family lives in Europe (Belgium) I want to move back after 13 years living abroad, mostly on other continents.

My question is three-fold:

1. To what degree can I run some (maybe only pre-stages are possible?) of the search while still living in Australia?
2. Is "Europe" as a geographical focus too broad? My plan would be to live rent-free at my mothers' summer apartment in the south of Spain (~1 hour from an airport but by the beach, not really a place where people work), and use remote interns - any holes that you can poke in this strategy? Would I be better off moving to a hub like London, renting space at WeWork and having my interns co-locate?
3. Given my timeline, I have about 18 months until I start my search - how could I best prepare whilst still working a full-time job to hit the ground running when I launch?

I am still relatively new to this world so any thoughts/ input would be very appreciated.

Thanks a million!
Vas

Reply by a searcher
from INSEAD in Brussels, Belgium

I'm based in Brussels so if you are ever around happy to grab a coffee to discuss. To answer your questions, you're focus is way too broad. Personally I find that not being present in the country and having a full-time job makes it difficult to find a target - searching is not really a "side job". So pick one country and be prepared to spend a lot of time there - you don't necessarily need to live there (I for example invest in Italy), but you should be spending at least 40-50% of your time there so you should make sure that logistically and economically you can make that work. The idea of managing interns remotely could work, but remember that unless you are paying them, these are people that require a lot of your time to manage (and generally it is easier to manage them face-to-face unless you are very experienced both at what you are doing and in managing people remotely). In terms of prep before starting to search, it depends how much you know already on topics like how a search fund works, valuation, structuring a deal, writing an offer, carrying out a due diligence, managing a company, etc. If you already know this, then not sure there is much for you to prep - you just need to get to work. If you don't then you can study that.

Reply by an investor
from New York University in Berlin, Germany

Hi Vas,

I think that Europe as a geographical focus is probably too broad for a single person. In each country you will be faced with different challenges regarding how to find the targets, how to close a deal, how to make a deal be successful.
Sure, you mention the use of interns which can help overcome some of these issues. However, most interns probably need close guidance and supervision unless you shell out 10k a month for an MBA intern.

I would recommend you focus on countries in Europe where you speak the language. This is the most important aspect to be successful after acquiring a business. It is indispensable to speak the local language considering we are taking about SMEs where most of the employees and clients will probably not be 100% fluent in English - and even if they are fluent in English, they prefer doing business in their mother tongue.

Cheers,
Julian

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