Only about 1 in 3 new businesses survive their first 10 years.
When you buy an existing business, the survival risk is already behind you.
Customers exist. Cash flow exists. The product works.
You're not gambling on product-market fit. You're optimizing a machine that already runs.
We break down data, deals, and lessons like this in our community.
Searchers, investors, and operators. Join us. No gatekeeping.
The model is proving itself.
681 search funds tracked by Stanford. 35% IRR. 4.5x ROI. A record 94 launched in 2023 alone.
If you're early in your search, the market is moving in your direction.
Why this matters if you're searching:
More competition for the same deals. But also more legitimacy.
Brokers are paying attention. The IBBA just published a guide telling their members how to work with search funds.
3 years ago, most brokers didn't know what a search fund was.
And it's not just search funds.
Family offices jumped from 16% of closed deals in 2024 to 30% in 2025.
Nearly 1,000 new buyers joined Axial in just the first few months of 2025.
The entire buyer landscape is shifting toward smaller, operator-driven acquirers.
Where are they winning?
98% of search fund deal interest is in the $1M-$3M EBITDA range.
Average deal size has nearly doubled too, from $5.4M in 2021 to over $10M in 2025.
Searchers aren't just buying more. They're buying bigger.
In 2022, search funds accounted for 6% of closed deals on Axial, a large deal platform in the lower middle market.
By 2025, that number hit 13%.
They doubled their share while PE firms held steady at ~21%.
3 years ago, search funds were a rounding error in lower middle market M&A.
Now they're closing 13% of deals on Axial and going toe-to-toe with PE firms.
Here's why that matters.
In 2022, search funds closed 6% of deals on Axial.
In 2025, it's 13%.
That's not a trend. That's a takeover of the lower middle market.
Searchers are going toe-to-toe with PE firms for deals and winning.
If you're exploring this path, we break down data like this daily in our community.
1995: Two guys buy Road Rescue, a struggling $6M roadside assistance company.
2010: That company is Asurion - worth $2.5 billion.
They didn't invent anything. They bought something broken and fixed it.
That's ETA.
"Terms are everything when buying a business. The selling price is not."
Most first-time buyers obsess over price.
Experienced buyers obsess over:
→ Seller financing %
→ Transition period
→ Earnout structure
→ Working capital peg
A $3M deal at bad terms beats a $2M deal at good terms.
Nobody talks about how lonely searching is.
You're not building with a team.
You're not shipping product.
You're cold-emailing business owners for months, getting rejected, and trying again.
That's why community matters. The people who get it are the only ones who can help you through it.
Why banks love funding acquisitions over startups:
Startups = no track record, no cash flow, high failure rate.
Acquisitions = financial history, existing customers, proven model.
Same bank. Same loan officer. Totally different risk assessment.
Buying is easier to finance than building.
Self-funded search deal math:
→ Median purchase price: $1.6M
→ Entry multiple: 3.3x EBITDA
→ Typical structure: 10-15% equity, 5-10% seller note, 75-85% SBA loan
→ Median equity ownership post-close: 88%
You can buy a real business with less cash than a Bay Area down payment.
78% of small business owners plan to sell their business to fund retirement.
Fewer than 30% have a succession plan.
This is the opportunity.
Millions of owners who need to sell, don't know how, and are terrified of handing their life's work to the wrong person.
Be the right person.
The best acquisition CEOs share one trait:
Coachability.
They ask employees why things are done a certain way.
They listen to board members.
They admit what they don't know.
The urge to "prove you're the boss" is the fastest way to tank a deal you just closed.
Broker deals vs. proprietary deals:
Broker: Competitive. Higher multiples. Faster process.
Proprietary: You found it yourself. Less competition. Better price. Harder to source.
Most searchers contact 1,000+ owners to find one proprietary deal worth closing.
That's the job.
Average search fund holding period: 7 years.
That's longer than most PE funds hold.
You're not flipping. You're building.
This isn't a financial engineering play. It's an operating play. The returns come from actually running the business better.
Sellers are your biggest financing source.
Not banks. Not investors. Sellers.
Why? They want:
→ A higher sale price (seller note justifies it)
→ Assured income in retirement
→ To see the business succeed
A motivated seller will often finance 20-40% of the deal. Sometimes more.
Ask.
The most common advice for new acquisition CEOs:
Don't change anything for 12-18 months.
Employees are scared. Customers are watching. You don't know what you don't know yet.
The urge to "prove yourself" destroys more deals than bad due diligence.
A Stanford study tracked search fund acquisitions.
36% of deals that produced negative returns had the same root cause:
The former owner didn't fully transition out of the business.
The hardest part of buying a company isn't finding it.
It's getting the seller to actually leave.
In 2008, 36% of Harvard MBA grads pursuing ETA chose self-funded search.
By 2017, it was 62%.
The trade-off:
→ You risk your own money
→ You keep 75-90% of the equity (vs ~25% traditional)
→ You close in 9 months (vs 21 months)
Ownership > salary.
The typical search fund deal funnel:
→ 1,000+ businesses contacted
→ ~50 conversations
→ ~10 serious looks
→ 1 acquisition
25% of searchers shut down before closing anything.
This isn't a side project. It's a full-time grind for 12-24 months.
Knowing that upfront is half the battle.
If you're exploring this path, we're building a community at Searchers.com
Searchers, investors, and operators sharing deal flow and lessons.
No gatekeeping.
The best part?
You don't need to invent anything.
You don't need to find product-market fit.
You need to find a good business with an owner ready to retire.
Then run it better.
Why doesn't anyone talk about this?
Buying a $2M services business isn't as sexy as raising a $50M Series B.
But search funds have delivered 32.6% aggregate IRR since 1984.
One entrepreneur in a Stanford study said he had only 2 failures out of 10 ventures.
The 2 failures? The businesses he started from scratch.
The 8 successes? All acquisitions.
The risk math is simple:
Startups: ~90% fail in the first 5 years.
Acquisitions: You're buying proven cash flow, existing customers, trained staff.
Here's what's happening:
→ 100,000+ businesses worth over $1 trillion need new owners in the next 10-20 years
→ 51% of US business owners are over 55
→ Most have no succession plan
Entrepreneurship through acquisition is actually larger than venture capital in aggregate investment, employees affected, and communities impacted.
Yet it barely gets mentioned.