Strategic as a minor investor in a Search Fund deal

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July 04, 2025

by a searcher from Stanford University - Graduate School of Business in São Paulo, SP, Brasil

Any examples of Strategic investors entering equity gaps in Traditional Search Fund deals? From one side, it can be an important validation, and it can also be an option for a 100% exit in the future. From the other side, other strategics may back off if one competitor is already on your cap table. Any thoughts?
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Reply by an intermediary
from Fundação Getulio Vargas, São Paulo in Florianópolis, SC, Brasil
We still dont have transactions enough to state for sure what woks better, but form my perspective search fund is totally different from VC, where you may need some validation. Therefore the tradeoff you mentioned is not relevant. In other words: if the target need some validation, you should think twice if it fits your investment criteria.
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Reply by a searcher
from Northwestern University in Salvador, State of Bahia, Brazil
I believe you pointed out the key tradeoff Wanted to hear more perspectives on this topic
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