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Hey Ragamuffins. If you cannot or do not get an ivy league MBA, a very good runner-up is a brother with one. I call this MBA adjacent, and I’ve been mooching off his network, knowledge and worldliness for more than a decade. From him I learnt of the world of Search Funds. (If you’d like to get an understanding of what these are and how they’re structured, see a table HERE.)

What we used to call people wearing their pajamas all day trying to figure out their next move? The folks at HBS crowned them searchers. That reframing from ‘Looking’ to ‘Searching’ can come with a $200k salary and a lot of support if you’re tapped into the right system. Leave it to the Ivys to dress up unemployment and call it Search. With a Capital ‘S.’

We were chatting through a deal I was looking at, and he asked “Are you doing this through a search fund?” An innocent enough question if you’re immersed in the jargon of Harvard, Wharton and Stanford. Which I was not. “Search fund?” “Yeah, people pay you to search and then take equity in the company you buy.” Here I was, searching like an idiot, for free.

🔍 Fast forward to today and I am fresh back from the Wharton ETA (Entrepreneurship Through Acquisition) Summit. I know, when I see ETA I also think Estimated Time of Arrival. But isn’t part of this whole journey letting go of some of that? We’ll arrive when we arrive dammit.

It’s the climb dammit.

We are after all, called ‘Searchers’ in this business, and damned if that doesn’t just describe my soul. It sure felt appropriate to have a little lanyard with my name and ‘Searcher’ emblazoned underneath.

Sitting next to an exited CEO at the Women’s Search Network breakfast, I asked her what brought her into Entrepreneurship through acquisition? ‘Entrepreneurship for Chickens?’  She asked. Thinking she had misheard, I repeated the question. She had heard fine.

“This is a way for people with lower risk tolerance to experience the buzz of entrepreneurship” she said. As someone who did entrepreneurship the ‘not for chickens way’, the -for people who like to run headfirst into as freight train way-I think that’s rather harsh and that the chicken version is pretty great. Because doing something the harder, longer way isn’t necessarily better. Like at all.

Let’s go back to last September, when I was looking at a marketing agency for sale, close to where I live. Female owned, super profitable, it seemed like such a great fit. I was CMO of a consulting firm at the time so the day to day operations of the biz were identical to my own and I had the history to demonstrate that. I spent many hours reviewing diligence materials, and brought in three other people to hear their perspective. My long term Hubspot (CRM) consultant analyzed the business and sent me a detailed report; ”The apparent shift from FTE/salaried to operational expenses, while good for margins, would make me question what is the asset you are really buying here?” Gulp.

My nephew, an AI wiz, was more blunt; “Sure, you should buy this! If you want to buy a charming little bookstore right before Amazon launches.” Both stinging concerns. Neal Jacobs (Maven Equity Partners) put it differently when he talked about how ETAs should spend months trying to kill a deal, keeping only those mutants that resolutely refuse to die.

But here’s the hard part, In the end, we pick the advice that resonates with the outcome we want. The most scathing review is easily overcome if you’re in love, feeling kismet or as Shakespeare would have it: "I'll look to like, if looking liking move.” Something about the idea of the ‘morning after’ with the marketing agency made me depressed. Although the margins are great and they boasted impressive customer retention, and though I loved that it was local and proudly women-led and I could do the day to day leading and running of operations in my sleep, I felt inexplicably queasy about the lifestyle of being a marketing agency owner (It didn’t align with my career identity) and was looking for an out. To be allowed to not love this one. Even if the numbers made sense. So when my trusted advisors presented reasons to kill the deal, I was relieved. And I did.

Angela Duckworth of ‘Grit’ fame, presented in a fireside chat at the conference. One of the questions she was asked was, “When to grit and when to quit?” She responded that there’s a sunk cost risk, (something we talked about HERE) and that we need psychological distance and a trusted confidant to call it when its time. I’ll add that we need other voices and perspectives in evaluating our pipeline, and calling us on being too in love, or too desperate to close. After all, no deal is better than a bad deal. “It was a form of naiveté, he thought, the way she continued to believe that all it took to get through life was grit. Sure, grit was critical. But it also took luck, and if luck wasn’t available, Help.”-(Bonnie Garmus, Lessons in Chemistry)

In evaluating a deal, and evaluating ourselves, there will be risk. We need to ask;

Am I the right person to mitigate the risk?

Am I the right person to add value to this business?

And the biggest question of all:

Can I win this game?

We’re just making a gamble with the data we’ve got.

A female entrepreneur munching her way through maze after maze? Round and round, back and forth she races to gobble up dots, energizers, fruit, and pretzels. Will she ever make it out of the mazes and be able to live happily ever after? (And consume a more balanced diet?)

If this trope feels familiar, think back to the OG hungry female ETA.

Ms Pacman.

How do you win at Ms Pacman? I looked up the rules; Eat as many dots as possible while avoiding the ghosts. I think that’s great advice.

“Relax. It’s only a game.”

―Thich Nhat Hanh

Searching is a state of being, not a temporary situation. The people who are changing the world are not done when they find, acquire, grow and exit a business.

We’re deal junkies and we’re built to build.

Last weeks’ newsletter is HERE, Thanks for your beautiful comments! Keep them coming. Here’s my favorite on from this week:

FREE TOOLS TO GET YOU STARTED:

 📍Where can I find deals? TEN PLACES TO START DEAL ORIGINATION

💼 Start with you. Always be selling. HERE are five actions to make sellers, investors and brokers swipe right on you.

📚 What I’m reading/doing/eating/buying

• I'm reading: People Love Dead Jews. Yes it would be nice if bedtime reading wasn't full of existential angst. But I didn't write the rules.

• Watching: The New Look:  Period drama + fashion trivia? I’m here for it. Depressed designers are my jam. 

• Eating: These Muffins on repeat, because there are no good bakeries where I live.

• Listening: Guided Meditation for Infinite Potential.

•  Where I’m hanging out: Had a blast at the Wharton ETA Summit 2024. Connect with me on Linked in if we chatted there!