Business & Finance
Business school graduates increasingly buy established firms through search funds
Recent graduates are raising capital to acquire small companies and take the helm as CEO, navigating both rapid growth and high operational risks.
The short version
- A growing number of MBA graduates are bypassing traditional corporate jobs and tech startups to launch 'search funds' that acquire existing small businesses.
- Specialized investors are backing these young entrepreneurs, citing attractive historic returns and succession opportunities for retiring business owners.
- While some buyers successfully expand their acquired firms, others face severe hurdles, including workforce friction, operational mismatches, and bankruptcy.
Key facts
- A record 94 search funds launched in the United States in 2023, with $682 million invested across search funds and acquired firms between 2022 and 2023.[BBC News]
- Dedicated investment vehicles such as Search Fund Partners, Aspect Investors, and Anacapa Partners actively back entrepreneurs using this acquisition model.[BBC News]
- Tuck School of Business graduate Ania Aliev acquired medical equipment company Life Support Systems in late 2023 and later doubled its size through an acquisition.[BBC News]
- Harvard Business School graduate Scott Duncan bought industrial manufacturer F&M Tool and Die in 2018 but closed the firm and filed for personal bankruptcy in 2025.[BBC News]
What remains uncertain
- The long-term performance and failure rates across the wider search-fund asset class remain uncertain as the volume of new funds reaches record levels.[BBC News]
Sources
- Why wait? Business grads buying firms to install themselves as CEOBBC News - Business