How much money do you need to start a search fund?
An average search fund takes approximately 19 months to find and acquire a company. The average starting capital of a search fund is approximately $426,000.
Is a SPAC a search fund?
Search funds are different from Special Purpose Acquisition Companies (SPACs) because the equity capital in a search fund is private versus publicly traded in a SPAC. SPACs also include a “promote” or “sponsor promote” provision where the management of the SPAC receives 20\% of the equity.
How much do search fund CEOs make?
While you search and operate, you will be paid a salary commensurate with your experience and location. Typically, we see searcher salary around $130,000, and CEO salary is around $180,000, which will grow as you gain experience.
How do you raise a search fund?
How to Raise a Search Fund
- Be certain you want to search.
- Get the right experience.
- Cultivate investor relationships early.
- Be thoughtful about timing your go-to-market.
- Write a strong PPM that satisfies all the “table stakes” items but tells your unique personal story.
- Don’t reinvent the wheel with your docs and terms.
Why would a company use a SPAC?
SPACs offer target companies specific advantages over other forms of funding and liquidity. Compared with traditional IPOs, SPACs often provide higher valuations, less dilution, greater speed to capital, more certainty and transparency, lower fees, and fewer regulatory demands.
Why are SPACs so popular right now?
The SPAC model has become popular because “in some ways it is fulfilling a need” for both firms going public and investors,” Roussanov continued. Firms filing for IPOs are only allowed to report historical financial performance, but with startups “it’s all a bet on the future,” Drechsler said.
How does a search fund work?
A search fund is an investment vehicle through which an entrepreneur raises funds from investors in order to acquire a company in which they wish to take an active, day-to-day leadership role. They do not seek out investors but live off of savings until they acquire a company.