What has been the most challenging part of your search? What was harder/easier than you expected?

 Search Survey Greatest Challenge & Easier/Harder Compilation

39 searchers, operators, and searchers who’ve exited shared their experience in running their search and company. One question I asked was, “What has been the most challenging part of your search? What was harder/easier than you expected?” This is a compilation of those responses. For individual surveys, compilations, and resources, head to the search fund page on this site.

What has been the most challenging part of your search? What was harder/easier than you expected?

  • It’s a lonely journey with more unknowns than I can prepare for. Not everyday is interesting and exciting. It makes feel out of control almost every single day.

  • The overall uncertainty around everything – random lulls and deals can move slowly

  • Difficult to find companies that meet the classes SF criteria at attractive valuation

  • Early on getting tech set up correctly, website, email, etc. + direct outreach has been relatively unsuccessful so far

  • Getting solid information from sellers. Brokers in this size range typically provide little to no curated information, and many sellers don’t have VDR populated with information at the beginning of conversations.

  • Finding qualified businesses.

  • Managing everything that you have going on.

  • Geographic constraint is both a blessing and a curse. Allows for me to be focused on that dimension and engage in community (industry groups and generally) in a way that I couldn’t if searching more broadly. On the downside it obviously limits the number of at bats. Additionally, because it is a network-driven search, I’m wary of getting the reputation locally as the person that throws out a bunch of LOIs. I Accordingly, being mindful of a very local network/reputation has led to perhaps slower moving, less formal engagement with owners and fewer LOIs. I don’t think that would be as serious of a concern if searching more broadly.

  • Most challenging – Maintaining focus. I initially tried contacting targets in too many industries at once and have now narrowed to 2-3 at a time. As you find adjacencies and new ideas from broker deals, it’s important to maintain a list of future industries/opportunities/contacts but not to get distracted.

    • Easier than expected – Getting a feel for how my investors evaluate deals. I’ve tried to get opportunities in front of them early and often, and I’m really happy with how well aligned we are on opportunities. I credit this to the conversations we had during the fundraising process.

  • Moving things from IOI to LOI.

  • Harder: managing the conversation and relationship building with owners. Easier: Generating lists and sending emails.

  • Finding enough companies to target. Prioritizing my time, there is always 10 other things you can be doing at any given time

  • Time-efficient sourcing and list building has been a challenge. Initially in Puerto Rico because there were no readily scrapable databases to quickly gain scale, and now in my website search because I like to have an initial human look at the website prior to sending an email.

  • Brokered only deal sourcing is tough at first. I don’t have any established relationships with brokers to get first looks at any of their good deals yet. I knew this would be the case and putting in the time to nurture the brokers and get to the first look stage takes time.

  • “Hurry up and wait” approach… feels like we’re always putting tons of effort into things in sprints and we don’t see the fruit of their labor for months

  • Finding a good business with an owner who wants to transition within my geographical constraints has been a challenge. I would say it’s been harder than expected.

  • Raising capital is easier. Finding companies is harder.

  • Most challenging – When the owner does the math and realizes they can make in 3 years what you are offering for the whole business. The hard part is having to pick just one business to buy. I’ve got three going right now, and I’d buy every one if I could.

  • Finding quality businesses that are a good fit. Due diligence is much harder than I expected.

  • Good Data / Information. Harder.

  • Covid has effected us a lot.

  • Messy financials, incompetent brokers and sellers who are not up to speed in what selling looks like to a lender and buyer. Every seller should know how the deal cashflows back to the buyer.

  • Finding acquisition partners, committed capital.

  • Convincing brokers and lining up senior debt.

  • Get to an owner before a broker has gotten to them.

  • Being consistently “on” on calls every day. It get’s extremely tiring!!

  • Getting responses for tech businesses is harder than we thought, only likely to get harder as search becomes more competitive.

  • It has changed and evolved through time. At first, the biggest challenge is to gain critical mass with regards to your pipeline and searching activities, so you can feel like your plate is full and you are making progress – in the beginning you feel like you don’t have that much work. With this comes the challenge of building a routine/work plan to make it feel like a job more than a random assortment of tasks. Once that is accomplished, with scale comes the need to build a team and learn to manage and delegate the different operating tasks – this is also challenging.

    • Then getting reps is important but challenging – first call, first meeting, first analysis, first offer, first DD, etc. are very challenging the first time, but get easier and more manageable with time. However, I feel that the most challenging component of searching that is true throughout time is the psychological and emotional toll that the whole process takes on you as a searcher. In a very raw way, as a searcher you fail everyday you don’t buy a business – the result of search is very binary: either you bought a business or you didn’t. Effort is great and important, but it is all for naught if you don’t buy a business.

    • Therefore, it is important to get psychological comfort by creating a process that can generate the feeling of accomplishment, providing the ability to celebrate small wins. Setting weekly, monthly, or quarterly goals with regards to hitting certain milestones (# of calls, meetings, IOIs, etc.) can help in making the whole process feel like the summation of a lot of small goals being accomplished, and remove the continuous sensation of failing everyday you don’t buy a business.

    • Additionally, with this, comes the emotional discipline and wherewithal to be able to either shut down a deal when you realize it is not the right one (even though the sunk costs may seem enormous) or to be able to quickly detach emotionally from a deal if it falls through because the owners step back.

    • Harder – Being able to balance finding business that passes the necessary filters to make you comfortable to pull the trigger and buy it, with realizing that no business is perfect and muster the strength to know when something is good enough.

    • Easier – getting comfortable talking to owners and feeling confident of what you are doing, even though it is the first time you are doing it.


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