You might be at that point in your life where you're thinking about making a professional shift, launching something big, but without jumping into the void. Or maybe you've been wondering for a while how to buy a business without being a millionaire. Well, that’s where the idea of a search fund comes in, a model that’s attracting people just like you: experienced, visionary, and ready to lead something real.

The idea is simple, yet powerful. Instead of starting a business from scratch, you acquire one that’s already working, make it your own, and scale it up. So yeah, you're not starting from a sketch on a napkin, you’re building on something solid. And that just makes a lot of sense.

Definition and Origin of the Concept

What is a Search Fund?

Alright, let’s start with the basics. A search fund is a type of investment vehicle created for a single purpose: to find, acquire, and run an existing, profitable business.

Here’s how it works. You, the entrepreneur, raise initial funding from a group of investors who back you during the search phase. They’re betting on you — your skills, your instincts, your commitment — to find a company with real potential. Once you find the right one, the deal is closed and you become the CEO. Just like that. As if it were your own company.

Brief History and Evolution of the Model

This model originated in the US in the 1980s, driven by Stanford University. Since then, it has evolved and adapted to different markets. For a long time it was mostly a thing in English-speaking countries, but over the past decade, we’ve seen significant growth in Spain and Latin America.

Today, business schools like IESE in Barcelona and INCAE in Costa Rica are actively promoting the model, attracting entrepreneurs who want to make an impact without reinventing the wheel.

How a Search Fund Works Step by Step

The Process: From Search to Acquisition

There are no secrets here, but there is a method. Every search fund goes through several phases:

1. Raising initial capital: This covers the search process — salaries, travel, legal support, and so on.

2. Finding the right company: This can take 12 to 24 months. You're not just buying anything. You’re looking for a hidden gem — profitable, stable cash flow, not overly dependent on the founder.

3. Due diligence and negotiation: Once you’ve found your target, you go through deep analysis to make sure it’s a viable acquisition.

4. Acquisition: With the support of your investors, you buy the company.

5. Management and growth: You step in as CEO and start optimising, scaling, and professionalising the business.

The Profile of a Search Fund Entrepreneur

The person behind a search fund (often called the “searcher”) usually has a background in business, some experience in consulting, finance or management. But more than the CV, what really matters is drive, vision, and leadership ability. It’s not just about finding a profitable business, it’s about convincing owners to sell and investors to believe in you.

Benefits and Risks of Investing in This Model

Why It’s Attractive for Investors and Entrepreneurs

Let’s get to the juicy stuff:

• For investors, it’s a high-return opportunity with less volatility than tech startups.

• For the entrepreneur, it’s the fastest path to becoming CEO of a company, without starting from scratch.

• It encourages organic, sustainable growth, far from market hype and trends.

• It professionalises existing businesses, creating value for employees, clients, and suppliers.

The Risks and How to Deal With Them

Of course, it's not all sunshine. There are challenges:

• Searching for companies is tough and lonely work.

• Convincing traditional owners to sell can be tricky.

• Transitioning leadership can create internal tension.

• There’s always the risk of hidden problems in the business.

That’s why having mentors, a solid advisory network, and financial acumen are absolutely crucial to survive.

How Search Funds Compare to Other Investment Models

Compared to Venture Capital, Private Equity, and Startups

What makes search funds stand out is the operational control the entrepreneur gains. You're not a hired CEO. You're the one calling the shots.

Real Cases and Success Stories in Spain and Latin America

In Spain, companies like Grupo MasterD or the acquisition of Empresa Reus by IESE alumni are strong examples of what’s possible. In Latin America, countries like Mexico, Colombia, and Peru are seeing a surge in activity thanks to new funds and support platforms backing searchers.

Is a Search Fund the Right Option for You?

Signs You Might Be a Good Fit for This Path

Ask yourself these questions:

• Can you see yourself leading a business with employees, processes, clients… starting tomorrow?

• Would you rather build on something existing than start from an idea?

• Do you have negotiation skills, management abilities, and strategic vision?

• Can you live with uncertainty for months while you search?

If you answered “yes” to most of these, then you’ve probably got the mindset of a searcher.

Conclusion: The Future of Search Funds in the Business Ecosystem

Everything points to search funds being here to stay. They offer a modern path to entrepreneurship, more realistic, less flashy, but way more solid.

In Spain, with so many family-owned businesses seeking succession, the environment is ideal. And in Latin America, economic dynamism and entrepreneurial energy make the model a perfect fit.

So if you’re looking for a different way to build something, or if you’re an investor seeking returns with purpose, this could be your thing.

And if you're ready to explore concrete opportunities (whether to acquire or sell a business in Spain) feel free to visit Business in Spain, where we connect real people with real projects.