Interesting Data from the 2022 Stanford Search Fund Primer

A closer look at the data from the newest edition of the Stanford Search Fund Primer.

Interesting Data from the 2022 Stanford Search Fund Primer
Article by
GTE Staff Writer
Article Date
August 22, 2022

Over the past 2 years, $776M of equity was invested at a median purchase price of $16.5M per deal. 

The median financial metrics of acquired companies are: 

  • Revenue: $6.4M
  • EBITDA: $1.7M
  • EBITDA Growth: 17%
  • Multiple: 7.3x

In 2021, searchers deal-sourced a median of 200 companies, down from 285 companies in 2020. Similarly, searchers on average search for 17 months in 2021, down from 23 months in 2020. 

This past year, 34% of searchers concluded the search process without an acquisition. This matches the acquisition rate from 2020. 

Returns remain incredibly strong. Traditional search fund partnerships on average generate a 40% IRR while self-funded solo searches generate an average of 27% IRR. 

These returns translate to considerable financial compensation for both investors and searchers. On average, the equity earned per entrepreneur per year is $2M for currently operating companies and $1.45M for exited entrepreneurs. 

Looking at the demographic shifts within search, the number of female search entrepreneurs increased to 13%. Around 60% of search fund entrepreneurs are white and 40% are of non-causasian ethnicities.