New to Entrepreneurship Through Acquisition?

Entrepreneurship Through Acquisition (ETA) is a path to business ownership where an individual or pair raises a small fund, searches for an existing profitable business to acquire, and then operates it as CEO. It is one of the most practical ways to become a business owner without starting from zero.

The model was developed at Harvard Business School and Stanford GSB in the 1980s and has since produced hundreds of successful acquisitions worldwide. In the UK, the search fund ecosystem is still young but growing rapidly.

How a Search Fund Works

The traditional search fund model follows a clear sequence:

1. Raise a search fund - The searcher raises a small amount of capital (typically GBP 300K-500K) from a group of investors. This funds a 2-year full-time search for the right business.

2. Search for a business - The searcher identifies, evaluates, and negotiates to acquire a single profitable SME. Target companies typically have GBP 1-5M in annual profit, loyal customers, and a retiring owner.

3. Acquire the business - Once a target is found, the searcher raises acquisition capital from the same (and sometimes new) investors. The searcher becomes CEO.

4. Operate and grow - The searcher-turned-CEO runs the business for 5-7 years, implementing improvements and driving growth.

5. Exit - The business is eventually sold, generating returns for the searcher and their investors. The searcher typically earns significant equity upside.

The model works because it solves a real problem: thousands of profitable UK businesses have ageing owners with no succession plan. Search funds provide a professional, well-supported transition path.

Who Is Involved

Searchers - Individuals (often MBA graduates or experienced professionals) who raise capital and dedicate themselves full-time to finding and acquiring a business. Most UK searchers are based in London.

Investors - Institutional funds, family offices, and experienced individuals who provide both the search capital and the acquisition capital. Many are based in Europe and the US but actively invest in UK deals.

Operators - Former searchers who have successfully acquired a business and are now running it as CEO. Their experience is invaluable to current searchers.

Explore the UK Ecosystem

Essential Reading

If you are exploring ETA for the first time, start with these:

1. 2024 Search Fund Study - Stanford GSB’s definitive dataset on search fund performance across 562 funds. The single most important document in the space.

2. Exploring Search Fund Structures - A clear breakdown of how search funds raise capital, structure deals, and align incentives between searchers and investors.

3. How Are Search Fund Investors Really Faring? - Honest analysis of investor returns in the search fund model, beyond the headline numbers.

Get Involved

• Attend an event - Check our events page for upcoming meetups in London
• Browse the ecosystem - Explore the UK ETA Ecosystem to see who is active
• Explore resources - Dive into our curated library of essential ETA research
• Get in touch - Questions or want to connect? Contact us