The search fund model allows an entrepreneur to secure funding from investors to buy and manage an already established SME, rather than starting a company from scratch.
According to noticias.madrid, the search fund is a model in which an entrepreneur seeks investors to finance the purchase of an existing company and its subsequent management. The starting point is not a new business, but a company with a track record, clients, and structure.
This scheme is primarily aimed at SMEs in the transition phase. Many owners approaching the end of their professional lives want to ensure the continuity of a profitable business but cannot find a successor. The search fund offers a solution for the company to remain active under new management.
Once the funding is secured, the entrepreneur takes over the management of the acquired company. According to the source, this formula reduces the risks of starting from scratch, as the buyer inherits an existing infrastructure and an already established customer base.
You may also like
