Start Ups vs Search Funds: Two Paths Toward Entrepreneurship

Comparing the search fund and startup journeys

Start Ups vs Search Funds: Two Paths Toward Entrepreneurship
Article by
GTE Staff Writer
Article Date
August 22, 2022

For many entrepreneurs, the dream of building a successful startup is impeded by the understanding that startups face a high failure rate in the first few years of operation. Knowing this, today’s business leaders are turning towards a model of entrepreneurship called entrepreneurship-through-acquisition (EtA).

EtA is made possible for many aspiring CEOs thanks to search funds, which provide them the capital to search, acquire, and scale an existing cash flow-positive and profitable small-to-medium sized business. Search funds primarily appeal to entrepreneurs with a low risk-appetite. By acquiring an existing business, entrepreneurs bypass the high failure rate of an early stage startup, which hovers around 20% within the first year, 70% within 10 years, and 90% within twenty years according to the Bureau of Labor Statistics. In contrast, only 17% of search-fund acquired businesses shut down or exit with a negative return. 

Generational Transfer Entrepreneurs is a search fund located in Pittsburgh, Pennsylvania that offers search guidance, expertise, and capital to help aspiring entrepreneurs succeed in their entrepreneurship-through-acquisition journey.