Paying Entrepreneurs To Find Right Biz
Jim Ellis and Kevin Taweel used a search fund to acquire a $6 million roadside assistance company with 45 employees that they built into the nation’s largest provider of insurance products to cellphone companies.
While most people have never heard of them, search funds are attracting increasing attention as a way for small businesses to beat the usual odds of success, even in the midst of a deepening recession.
This is the way a search fund typically works: One or two ambitious graduates of a top-tier business school, who want to run their own business but recognize they lack practical experience, offer themselves as fledgling entrepreneurs who can make some tough-minded investors a lot of money.
These investors put up about half a million dollars for the pair to spend up to two years scouring the marketplace for a promising business with $10 million to $30 million in revenue.
If satisfied with the choice, the investors help finance the acquisition of the business, join its board and give their young partners a crash course in hands-on management.
If all works out, the venture grows and makes everybody richer.
Continue Reading: “Paying Entrepreneurs To Find The Right Business”
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Jaclyn on March 19th, 2009 8:08 am
Very interesting article…that seems like an awful lot of money that they put up, it just seems like a huge risk they could be taking by putting up so much money, but so far their company seems to be doing good thing’s for them, good luck to them in the future!
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