Self-funded searcher under LOI: do traditional search terms still make sense?

searcher profile

January 30, 2026

by a searcher from IESE Business School in Barcelona, España

Curious to get the community’s take and hear real experiences. When a self-funded searcher is already under LOI and progressing through diligence, but still has no acquisition capital commitments, does it still make sense to follow the traditional search fund investor model and standard terms? In that situation, it feels like there may be room to find a better-fit partner (and potentially better economics for the searcher) by going outside the classic search investor pool—strategics, operators, industry-focused HNW/family offices, or independent sponsor-style capital. Would love to learn from anyone who’s been in this exact spot: what route you chose, what terms you ended up with, and what trade-offs showed up in practice.
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commentor profile
Reply by an intermediary
in Austin, TX, USA
Never comingle traditional search and self funded search in any area of the deal: terms, investors, deal structure, etc. They are not the same and you will regret having traditional search investors involved in a self funded deal. We reverse engineer the answer you are looking for. Start with an attractive exit MOIC to the investors and calculate what% ownership gives them that MOIC for the $ they invest. Don't forget to include the effects of paying off debt. You can search Searchfunder for a model of this. I am sure someone has already addressed this issue.
commentor profile
Reply by a searcher
from Stanford University in Sausalito, CA 94965, USA
If you go to the traditional investor pool as someone who did a self-funded search, you'll get slightly better economics is my sense (they'll give you some credit for bootstrapping). Also you don't sit behind your search capital But also, it won't be material But if you step back, 25% ownership (if you perform) without a PG is pretty good You can probably find better terms but will take a ton of work etc The traditional search fund investor market is very efficient
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