Self-Funded vs Traditional Search in Healthcare

March 28, 2023

by a searcher from Temple University in Chicago, IL, USA

I am currently doing a search within the target area of Wisconsin/Northern Illinois for a home care, hospice or assisted living facility. I am open to other areas, but these are my primary focuses at this time. I have a master's in geriatrics and used to own a care management practice. I have an MBA and have worked extensively in hospice and home care. I am also a certified executive coach and have used my skills to help many companies improve operations and increase business valuation. I have done this in businesses from SME to large companies like Salesforce, Amazon, Deutsche Bank, etc.

Having said all this, I am wondering if I should be doing a self-funded search or a traditional search. I was previously devoted to a self-funded search, but I am now seeing some of the attractiveness of doing a traditional search. Is there anyone that I need to be in touch with in terms of investors in the traditional space? Who can you point me to so we can have a conversation? Many thanks in advance.

Reply by a professional
from Villanova University in West Chester, PA, USA

^redacted‌ said it super well. With a traditional search, you're giving up your upside potential in exchange for minimizing your downside risk. With a self funded search, you receive all of the upside potential and retain all of the downside risk. There are a lot of ways you can fundraise other than giving up equity in the business that people don't consider because they're unaware they exist. A lawyer will guide you through the fundraising options, what makes sense for your goals, and provide the best structure to maintain upside potential while minimizing downside risk. I'd be happy to talk further.

Reply by a searcher
from INSEAD in Boston, Massachusetts, EE. UU.

@brandyn the answer to your question depends more on your goal and your financial situation than on your experience and background. If you have resources to fund your search, you want to optimize your returns and you are confident you can execute the search and fundraising successfully, you should consider the self-funded path. Otherwise, if you want to reduce risks, you need support during the search and fundraising, and you need financials resources to back your search phase, then you might consider the traditional path.
Another point to consider, is to broaden your target industry/sector, to increase the chances of finding an appropriate target.
I hope that helps.

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