Young Entrepreneurs Find a Way to Indulge Their C.E.O. Dreams
Summary
After raising a search fund of more than $30 million from a small group of investors, Mr. Silva bought MásLabor, a Virginia consulting firm specializing in employment visas, in July 2021. Search funds started out as a business school experiment four decades ago, but have gained popularity in recent years as persuasive newbies armed with M.B.A. degrees entice investors to make these niche bets with the promise of high returns. Mr. Grousbeck is credited with coming up with the search-fund idea in 1984 when he was a lecturer at Harvard Business School and helped Jim Southern, a student in his entrepreneurship class, raise money to acquire Uniform Printing, a printer of specialty insurance documents. While there is no recipe for a successful acquisition, most share a few key ingredients: The company is profitable and in a fragmented industry (think HVAC, home health care or waste management), and its owners are approaching retirement with no apparent heir. Mr. Silva, who became the chief executive of MásLabor, said he had written over 1,000 personalized emails and placed about 800 phone calls before finding the right target — a company in good financial health, with owners willing to sell.