Generational Transfer Entrepreneurs

GT Entrepreneurs co-founder Brenden Van Buren is on the popular Acquiring Minds podcast! Listen in as Brenden sits down with Acquiring Minds podcast host Will Smith to discuss all things search/ETA! Brenden and Will dive into both Brenden’s acquisition of commercial fencing installation business Pro Max Fence Systems, LLC as well as how GTE was first started as an accelerator when Brenden was an MBA student at Carnegie Mellon University - Tepper School of Business. Will presses Brenden on buying a fencing business, known for being cyclical and project-based, two attributes that investors typically tell searchers to avoid. The episode also provides Brenden's perspective on the art of search and what he's learned by investing in other searchers. Watch the full episode here or on your favorite music/podcast streaming platform: https://lnkd.in/eZy9iwgE #acquiringminds #generationaltransferentrepreneurs #entrepreneurshipthroughacquisition #eta #searchfunds #gtentrepreneurs #gte #business #investing #podcast #entrepreneurs

Successfully Raising Capital in a Competitive Funding Environment Raising capital is tough, especially in a market where rates are expected to stay higher for longer. As a searcher, what are the best ways for you to strengthen your capability to successfully raise capital? Here are a couple: Immerse Yourself Into the Search Culture 🙌 A great way to help your odds is by attending ETA conferences. These events are very impactful because they bring together search fund entrepreneurs, investors, MBA students, faculty, and other participants in the ETA ecosystem through engaging presentations and interactive sessions. Nothing beats connecting with like-minded individuals, expanding your network, and gaining valuable insights from industry experts! GTE typically attends multiple conferences each year. Network to the Moon! 🚀 Take the time to connect with searchers and gain many perspectives on the space. Every searcher has their own nuanced experience, so we suggest talking to as many as possible. Setting a target goal as the baseline can help; for example, try talking to at least 25+ searchers. Regardless if they are raising or operating, learn about the mindset that has helped them succeed thus far. Do a Search Internship Before the Search 💪 Search fund internships provide valuable hands-on experience and insights into the entire process, allowing aspiring searchers to learn best practices from new or veteran partners. Getting early reps through an internship better prepares prospective searchers by teaching them how to refine their approach and avoid key mistakes. Additionally, internships offer networking opportunities and exposure to the search fund community, potentially opening doors for future deal flow, capital raising, or partnerships.

Happy Sunday! Today we will be highlighting Andrew Petrie on our 12th Searcher Sunday. Andrew’s entrepreneurial upbringing motivated him to embrace the search fund path as the vehicle to unite his passion for ownership and making a positive impact. While rejections from investors and businesses can be challenging, Andrew perseveres by focusing on his core motivations, relying on his network, and methodically tackling his search. Through grit and flexibility, Andrew strives to achieve his goal of acquiring a company where he can apply his skill sets to amplify an already strong culture. Check out Three Meadows Partners to learn more!

Thriving in the Search Fund Landscape: Strategies to Surpass Competition: In the dynamic arena of search funds, success hinges not just on spotting opportunities, but on standing out amidst fierce competition. Maksym Zubenko delves into essential strategies to not only survive but thrive in this landscape, offering invaluable advice for entrepreneurs aiming to elevate their search funds to the forefront of the market. Understanding your unique value proposition is paramount in this endeavor. It's about refining what makes your search fund the go-to choice for discerning business owners. Whether it's the collective expertise of your team, your innovative growth vision, or the unwavering post-acquisition support you provide, articulating your value proposition clearly sets you apart. Moreover, Zubenko emphasizes the importance of industry specialization as a strategic advantage. By immersing yourself in the intricacies of specific sectors, you not only gain a deeper understanding of market dynamics but also craft more compelling acquisition proposals tailored to resonate with potential sellers on a profound level. Building strong relationships and prioritizing transparent communication are foundational pillars of success. Business owners place immense value on the legacy of their company post-sale. Thus, offering a clear post-acquisition plan that outlines your vision for the company's future under your stewardship can be a game-changer, distinguishing your offer from competitors. In the competitive landscape of deal-making, flexibility and creativity in deal structuring are indispensable traits. By being open to various deal structures, financing options, and transition arrangements, you demonstrate agility and adaptability, making your offer more appealing to sellers. By integrating these strategies with a relentless focus on comprehensive due diligence and operational excellence, search funds can navigate the competitive landscape with confidence. What tactics have you found most effective in distinguishing your search fund? Source: (Zubenko 2024)

Rate Cuts Elude Market Optimism: Search Fund Implications In our second Search Fund Insight, we discussed implications of rate cut optimism on search. Stickier inflation throughout the first two quarters of 2024 has kept the Fed’s hands tied, making rate cuts in June and July highly unlikely. So, what can higher rates for longer mean for the search fund sector? Financing Costs Stay Higher 💰 Higher financing costs due to elevated interest rates enforces tighter cash flow management by the acquirer. Higher interest payments on debt financing will strain the acquired company's cash flows, leaving less room for operational missteps or unexpected expenses in the initial years post-acquisition. This can be concerning, especially for first-time searchers. Valuation Gaps Continue ❌🤝 After an extended period of higher rates, two sides of the coin appear: sellers who have lowered purchase price expectations, and others who still demand a premium for their high-quality business. Especially in this “Silver Tsunami” of generational business transfers, search funds need to diligently assess each opportunity. We are in a period that is poised to have valuation gaps, so finding reasonably priced targets that meet your return requirements is key. Greater Competition 👊 With higher financing costs reducing the number of potential targets that meet return requirements, the remaining attractive opportunities are scarcer, leading to increased competition among search funds trying to secure those limited viable deals. Strategic buyers with lower-costs of capital may also pursue the same limited set of targets, intensifying the competition that search funds face. As a result, premiums can arise on this contracted pool of reasonably priced businesses, forcing search funds to continue to look elsewhere for a promising company.

Another Sunday, another opportunity to highlight one of our awesome searchers. Today we will be highlighting Alyssa Strasser. Driven by a strong entrepreneurial spirit and desire to create a positive impact, Alyssa pursued an MBA at Yale where she discovered the search fund model as an avenue to acquiring a business. Alyssa’s search approach is characterized by an unwavering commitment to values-driven leadership and a foundational trust with her like-minded partner, Ali Platon, that provides essential support. Alyssa strongly advocates prospective searchers to engage in self-reflection to align their personal goals with the search journey's demands, while also deeply immersing themselves in market landscapes to clarify their ideal acquisition profile. Check out Savannah Search Capital to learn more!

Solo or Partnered Search: Identifying What’s Right For You You’ve decided to embrace the search fund landscape! Now you have a key decision to make–do you want to go into this venture alone or with a partner? At GTE, we have invested into and have encountered a wide variety of search funds that have decided to go into the process solo and as a team. Here are a couple of key insights to consider while making this personal decision. Flying Solo🔥🚀 As a solo searcher, you have complete autonomy over the search process, acquisition targets, and eventual company operations, before limited partner discretion. Additionally, you may end up with a higher equity percentage of the company than you would in a partnered search. Aside from solo operations, you will have to rely solely on your network of investors and professional / personal contacts for guidance and support. You may save time in various agreements on search preferences and documenting the intricate details of the partnership, but ultimately you will be going into this daunting endeavor alone. Dual Partnership 🤝🗣️ Partners have the opportunity to lean on complementary skill sets and support during the intense search and acquisition process. This may allow them to better succeed in managing the company, while making the entire search experience more compelling. Partnered searchers often require more capital, but they have the ability to purchase a larger company that can effectively sustain both salaries and support divvying up roles based on skills. The true value of a partner should be in the operating period over several years, not only the search phase, as it spreads the workload and increases the odds of successfully finding and operating a great company. It may be challenging to be aligned with your partner(s) on goals, risk tolerances, leadership styles, and long-term vision, but doing so can spread your bets and increase your odds of 1) finding a great company and 2) successfully operating the company. In today’s market landscape, what are your opinions on both pathways for search? Source(s): Buy Small Sell High (2022), SFA (2023), Stanford Search Fund Primer (2021)

Hi everyone! We’re thrilled to be highlighting Joshua Ahrens on this week’s edition of Search Sunday. With experiences in the military, MBA, and investment banking, Joshua found the search fund model to be the perfect path to pursue his entrepreneurial aspirations and leverage his background. Maintaining a never-quit mentality, he has built a strong team around him to provide advice and guidance, boosting his confidence while reminding him he is not alone on this challenging but rewarding journey. Joshua acknowledges that mistakes are inevitable but believes in continuous improvement and forward momentum. He emphasizes the importance of thorough preparation before embarking on the search, including understanding the model, target industries, pitching to investors and businesses, and immersing oneself in literature, podcasts, internships, conferences, and networking. Check out NextGen Growth Partners to learn more!

This month, I embarked on an exciting new chapter! I launched Three Meadows Partners, an entrepreneurial venture to acquire an existing U.S. small/medium sized business. I have a fantastic team of investors and mentors who have joined me on this journey. I am incredibly grateful to have them on my team. I’m also appreciative to the entrepreneurs, mentors, searchers, friends, and family who have guided me, been a sounding board, and offered advice - thank you! Why am I going down this path? I’ve been blessed to get a first-hand look into the world of entrepreneurship from my father, Robert Petrie, who started Grace Imaging | a Brook + Whittle Company when I was younger. He would say a similar thing about my grandfather, ‘Pipi’, who started a plumbing business after he returned from WWII. Watching my dad take a risk and execute on his dream of being an entrepreneur inspired me to think differently about what a career could hold. I’ve also worked for some highly talented entrepreneurs in my career who built amazing companies, and they helped shape my own approach. The opportunity to lead and grow a small business at this stage in my life is a rewarding and meaningful path that I am extremely excited about. What’s with the name? The name Three Meadows holds special significance for me — it's the neighborhood in Perrysburg, Ohio where I grew up, a constant reminder of my roots and the journey ahead. If you're interested in keeping in touch with how things are going, have ideas to share, or want to offer introductions to business owners, please reach out at: [email protected] Tom Cassutt David Lazier Javier M. Páez Horacio Ramirez de la Garza Matthew Burr Max Schaefer James Van Buren Brenden Van Buren Ryan Leckie, CPA Jonas Linke Trevor Lwin Bruce Moszcelt Stephen Goddard Paul (Lew) Davies III Rene Lajous Natalie Cryer Roberto Liaño Goes, CFA Henry Davis Steve Divitkos Kenneth ODonnell Jr Tobin O'Donnell Kent Weaver Jonathan Yellen Glenn Carlin Sarah Hasan Gideon Wilk Matt Brugner

 Navigating the Depths: Decoding Search Fund Success and Failure Why do 90% of search funds falter, and what insights can we glean from a decade of empirical data? Chris Walton, JD, navigates through this perplexing terrain, shedding light on the pitfalls and pathways to success within search fund ventures. Unveiling the Pitfalls: Walton dissects the crucible of failure within the search fund model itself, revealing its inherent struggles with operational risks and acquisition complexities. Delving deeper, Walton unveils the grim reality of the acquisition phase – the battleground where most search funds stumble. Faced with soaring valuations, cutthroat competition, and the elusive quest for 'the perfect company,' many succumb to the weighty burden of decision-making. The absence of strategic direction at this critical juncture often precipitates failure, echoing the sentiment echoed by a 2017 Harvard Business Review study, which cited a lack of due diligence and inadequate valuation methods as primary reasons for failure. Charting a Course for Success: However, amidst the gloom, there is hope. Walton's discourse extends beyond diagnosis to prescription, offering a roadmap for success within search funds. Recent data from the Stanford Graduate School of Business reveals an aggregate pre-tax internal rate of return of 35.3% for search funds, underscoring the tangible rewards awaiting those who navigate this landscape with prudence and precision. Moreover, Walton underscores the transformative power of mentorship, citing that a third of successful search funds in the past decade attributed their achievements to effective mentorship. By learning from past failures and embracing the knowledge of seasoned mentors, aspiring search fund founders can chart a course towards success, armed with insights gleaned from both empirical data and experiential wisdom. Interested in sharing your insights on enhancing search fund success? Let's discuss! Source: (Eton Venture Services - Chris Walton)