You can’t go two minutes without hearing about the allure of venture capital and private equity or the cult of entrepreneurship and the start-up.
However, these things are hard! Venture and P/E require large pools of patient capital, deep expertise and long time horizons. Entrepreneurship requires a unique angle, force of will, operational deftness and a 24/7 personal commitment to success.
This has led to the development of SEARCH FUNDS – pools of capital designed to invest in small and medium sized businesses (SMB’s) businesses that have gotten off the ground but aren’t exercises in organizational change. STANFORD has done extensive work investigating their attractiveness. These small and medium-sized businesses stretch across many industries and usually have annual revenues of between $200,000 and $20 million.
These businesses are past the start-up stage and usually profitable but could use help in professionalizing certain operating aspects.
This has attracted the attention of investors looking for outsized returns and many entrepreneurs looking to run a business without the “startup experience.”
Enter STEVE RESSLER–
Steve is a serial entrepreneur with 3X exits in GovTech and Software as a Service (including his sale of his first business to Vista Partners). His work has taken him deep into the SEARCH FUND and SMB operator space. He has lots to tell us about both ends of the “search fund” experience, the SMB phenomenon and where it is going. We also cover some great work he’s doing with Veterans in the operator space.
Experience as a founder
Having an early exit
Software and Government Services-
What are the competitive advantages/niches you’re looking for here?
The appeal of SMB space?
Running a Fund vs being an Operator?
What is the timeline / exit strategy for your investments?
How do the family dynamics differ in search investing from starting the business?
When buying the businesses how do you deal with the personal dynamics?
Do you get involved in the family dynamics?
How do you analyze that?
Involvement with Veterans programs: SEARCHACQUIRE