More than 40 years ago, H. Irving Grousbeck helped introduce the search fund, a new model in which entrepreneurs raise capital to find, acquire, and lead a private company. “It’s the most direct route to owning a company that you yourself manage,” said Grousbeck, the MBA Class of 1980 Adjunct Professor of Management, Emeritus, at Stanford Graduate School of Business and the co-founder of the Grousbeck-Holloway Center for Entrepreneurial Studies (GHCES).
Since 1996, GHCES has tracked over 850 core search funds in the United States and Canada, and charted the field’s evolution. Its latest Search Fund Studyprovides new data and a look at long-term trends.
“This year we added public market equivalent comparisons,” noted Stefanos Zenios, the Investment Group of Santa Barbara Professor of Entrepreneurship and Professor of Operations, Information & Technology, faculty director of GHCES, and one of the study’s authors. “This allows us to see how search funds perform relative to public markets and helps us identify value drivers— factors that contribute to returns.”
“The study includes several key additions,” remarked Peter Kelly, MBA ’89, Lecturer in Management, the study’s primary author since 2016, and one of the first seven search fund CEOs. “For the first time, we’ve separated out data on long-duration enterprises — LDEs — so people can understand what makes those companies different. And we’ve dug deeper into acquisition and returns insights, looking at which factors are linked to better outcomes. The goal is to shine a light on what’s working. We want to give the community — whether you’re deciding if search is right for you, currently searching, or investing — accurate information on real-time trends.”
Among the study’s key findings:
- The number of search funds continues to grow, with the number of newly launched core search funds staying at historically high levels in 2024 and 2025.
- About half of search funds launched between 2021 and 2024 successfully acquired a company. Since the first report in 1996, the aggregate acquisition rate for search funds has been 58%.
- Acquiring a company typically takes around 20 months. The median purchase price for acquired firms in 2024–25 was $16 million.
- The top industries targeted by searchers in 2024–25 were services, software, and education.
- Search funds’ performance has consistently outperformed the S&P 500. The aggregate public market equivalent (PME) across all search funds is 2.88. As of December 31, 2025, all search funds generated an aggregate IRR of 33.9% and a ROI of 4.75x.
“Search funds remind us that there’s more than one path into entrepreneurship,” said Deb Whitman, MBA ’86, director of the Grousbeck-Holloway Center for Entrepreneurial Studies. “This study gives the entire community — searchers, investors, and students still deciding if this path is right for them — the long-term data to better inform their choice.”
