Should I sell to a search fund or a private equity firm?

A search fund is an individual entrepreneur, or small team, backed by investors, who raises money specifically to buy one company and then run it as the owner-operator CEO. Private equity firms manage pooled funds and buy many companies, often building roll-ups with professional management. They suit different sellers.

On price, private equity generally pays more, roughly 4x-8x EBITDA, versus about 3x-5x EBITDA for a search fund, which is buying a single business with more limited capital. PE also brings institutional resources and may roll you into a larger platform, while a search fund concentrates one motivated operator on your company.

Fit matters as much as price. A search fund can be ideal if you care about legacy, culture, and handing the business to a hands-on successor who will live in it daily; searchers often want the founder to transition out gracefully. PE can be the better choice if you want a higher headline price, equity rollover upside, and the backing of a larger organization.

DealSeam is not a traditional business broker; we introduce owners to both search funds and private equity buyers where there is a fit, with the buyer paying our success fee so sellers pay nothing. We never guarantee a buyer or a specific price.