Search Party

Columbia ETA Club Co-Presidents: 'Emphasis on People' Drives Search-Fund Growth

As a growing number of MBA students become interested in Entrepreneurship-Through-Acquisition (ETA), a proper understanding of the challenges involved in finding and running a business is essential, say Austin Fruchter and Rohit Datta, Co-Presidents of the Columbia Business School ETA Club. 
The Columbia ETA Club provides students with exposure to the ETA process, connecting them with investors, operators, and service providers to better understand the search opportunity. “Search is a relatively lonely process,” says Datta, adding that the club also plays a crucial role in building a support network for students before and after they graduate.
Over the past year, interest in Columbia’s ETA club has surged, with events doubling and more students engaging in the ecosystem. 
In a candid interview with Search Party, Fruchter and Datta describe common traits among ETA-oriented MBA students. Many are drawn to the tangible nature of small business ownership, seeking to step away from high-level corporate roles in favor of hands-on leadership. However, misconceptions persist—particularly about the level of personal commitment and operational complexity involved. “Some students don’t realize how ‘dirty’ it can get,” says Fruchter.
The co-presidents also highlight the robust investor ecosystem surrounding Columbia’s ETA program. Investor interest is high, and Columbia students are encouraged to engage with potential backers early. “You don’t want your first interaction with an investor to be, ‘Hey, I need money,’” says Datta. 
Fruchter and Datta themselves plan to partner on a search fund after graduation, and they discuss the benefits of partnered search. “It’s incredibly impactful to have someone who pushes you and refines your thinking,” says Fruchter. 
Datta, who previously co-founded a SaaS company, agrees, noting that the right partnership can mitigate individual weaknesses.
Looking ahead, the Columbia ETA leaders see institutional capital increasingly moving into the space. But they hope the ETA community’s emphasis on people remains its defining trait. “The people in the business drive the value creation,” says Fruchter. “Taking care of employees and empowering your team is a major factor behind the success of search-acquired businesses.”
Search Party Lead Sponsor:Next Coast Legacy [https://lnkd.in/eSAuRW5p]
Search Party Sponsors:Avidbank [https://www.avidbank.com/]Boulay – Contact Boulay's Search Fund Team: [https://lnkd.in/eFF88SVf]Mayer Brown [https://lnkd.in/gU7sPPSg]Plexus Capital [https://plexuscap.com/]
Search Party video-podcast website:[https://lnkd.in/efJEa6GV]

New CEO, You Probably Don't Fully Understand Sales

Failing to strengthen the sales function can undermine the growth of a newly acquired business, a CEO stumble made worse in a leveraged environment, three veterans of the lower-middle-market tell Search Party.
Founder-led small businesses often lack structured, scalable sales systems—and the ETA searchers-turned CEOs who acquire them must rapidly diagnose and improve how EBITDA is generated, according to a panel of experts convened for a Search Party conversation. 
The need for a sales plan is of particular importance to Entrepreneurs-Through-Acquisition (ETA), who search for, acquire, and run lower-middle-market businesses, in most cases as first-time operators. 
These CEOs must also navigate the realities of a leveraged environment. Katie Walker, a Principal at Plexus Capital, highlights the added pressure of servicing debt while investing in growth. "Hope is not a strategy," Walker says. "Many of these businesses grew at 10% per year under a founder. But that’s not a plan—that’s just inertia. Counting on that same trajectory post-acquisition is dangerous."
Walker urges CEOs to stress-test their growth assumptions and be realistic about sales investments. Many underestimate the time and resources required to build a functional sales operation. "Without a structured, high-performing sales team, growth stalls," Walker warns. "And in a leveraged environment, that’s a real problem."
Dustin Sellers, a Managing Partner at ETA private equity firm Next Coast Legacy, explains that many of these businesses have grown on relationships and referrals, not disciplined sales execution. But following an acquisition, growth isn’t optional—it’s necessary to meet the demands of debt service and investor expectations. "Most first-time CEOs have never sold anything," Sellers says. "They come from top business schools where they studied branding, pricing, and marketing—but not sales execution. And now, they must create a revenue flywheel, fast."
Mark Mullins, a sales consultant specializing in private equity-backed businesses, warns that new CEOs often fail to grasp their own sales organization’s weaknesses. "They know finance, they know ops—but they assume their sales team must be doing something right," he explains.
Mullins says he often meets CEOs who say, "We need more sales," but can’t articulate why they’re selling what they’re selling—or why they’re not selling more. By digging into the details—reviewing sales calls, analyzing customer conversations—Mullins often finds a fundamental lack of accountability and process. "Many legacy salespeople simply aren't A-players—and they never will be," he says. "New CEOs need to decide quickly: Can they improve? Or do they need to be replaced?"
Sellers notes that the best CEOs acknowledge their blind spots early and bring in sales expertise fast. "The ones who hire a sales leader quickly are the ones who scale successfully," he says. "The ones who try to figure it out themselves often find they’re a year in—and two quarters behind plan."
ETA CEOs are often skilled in operations, finance, and strategy, but without a clear, repeatable sales playbook, they risk stalling their company’s momentum. "You're not being asked to reinvent sales," Sellers says. "You're being asked to execute on the basics. And if you don’t, the business won’t grow."
Search Party Lead Sponsor:Next Coast Legacy ⁠https://www.nextcoastlegacy.com/⁠
Search Party Sponsors:Avidbank ⁠https://www.avidbank.com/⁠Boulay - Contact Boulay's Search Fund Team: ⁠https://boulaygroup.com/searchparty/⁠Mayer Brown ⁠https://www.mayerbrown.com/en⁠Oberle Risk Strategies: ⁠https://oberle-risk.com/⁠Plexus Capital ⁠https://plexuscap.com/⁠
Search Party video-podcast website: ⁠https://searchpartypodcast.com/⁠

The Walk-On Linebacker who Grew His Business 24x

Shortly after acquiring security-camera service ⁠EyeQ Monitoring⁠ nine years ago, Markus Scott had no way of knowing he’d eventually grow revenue by a factor of 24. He was too busy dealing with “a whole list of terrible things” that indicated the business was doomed. In an interview with Search Party, Scott says, before detailing these tribulations: “This is the place where I should be pouring bourbon.”
Scott’s path to profitable growth is an Entrepreneurship-Through-Acquisition (ETA) success story, but it started as a looming failure. The day the acquisition closed, the first-time CEO learned an employee had been accused of sexual harassment. Then the company’s servers contracted a virus. Then the bookkeeper quit. Then the seller tried to start a competing business. Scott says the deep relationships he built with his workers ended up improving team culture, which impacted customer satisfaction.
Scott grew up in a middle-class home in Gainesville, Florida. His father was a former San Diego Charger turned educator, with an entrepreneurial side business to supplement the family income. Scott says he, too, eventually wanted to build a lasting business. When he learned about the ETA model, Scott enrolled in business school at Kellogg, and eventually raised north of $300,000 for a two-year search. 
After a “devastating” month-fourteen deal collapse, Scott eventually found a very small business in a great industry. His investors, including Next Coast Legacy, encouraged him to structure the deal like a growth equity investment. Scott was a walk-on linebacker and fullback at the University of Florida. While his time on the field was minimal, Scott says the discipline of daily, grueling workouts prepared him for the roughness of entrepreneurial life.
Search Party Lead Sponsor:Next Coast Legacy⁠ https://lnkd.in/eSAuRW5p⁠Search Party Sponsors:Avidbank ⁠https://www.avidbank.com/⁠Boulay - Contact Boulay's Search Fund Team:⁠ https://lnkd.in/eFF88SVf⁠Mayer Brown ⁠https://lnkd.in/gU7sPPSg⁠Oberle Risk Strategies ⁠https://oberle-risk.com/⁠Plexus Capital ⁠https://plexuscap.com/⁠
Search Party video-podcast website:⁠ https://lnkd.in/efJEa6GV⁠

Kellogg ETA Club Co-Presidents: 'The Journey is Worth It'

An increasing supply of investor capital is chasing business-school students contemplating ETA as a career, and "search-curious" MBA candidates should know the risks involved are manifold, but well worth the journey, according to Matthew Conley and Daniel Lazier, Co-Presidents of the Kellogg School of Management's Entrepreneurship Through Acquisition Club.
The Kellogg ETA Club was spun out of the school's private equity club in order to raise awareness of ETA, share best practices and help students self-reflect on whether their skills, personalities and life goals align with this non-traditional career path, say Conley and Lazier.
In a frank discussion, the co-presidents discuss the growing popularity of ETA across MBA programs, and the personal qualities that Kellogg ETA club members tend to share, principally a desire to control their own destinies and pursue a more impactful form of business leadership. The search-curious at Kellogg tend to be "motivated by something different than money," notes Lazier.
Conley says ETA tends to offer more "internal goods" than "external goods," meaning that while potential money and status may not be as stratespheric as one might find in private equity or investment banking, the intangible benefits of "seeing your fingerprints all over something" are possible in spades in an ETA career. In particular, having an impact on the lives of your employees and their families can be very gratifying, says Conley.
The co-presidents describe the pleasantly "round-elbowed" ecosystem of the Kellogg ETA search ecosystem.
The ETA club is a locus of activity at Kellogg, with potential investors sometimes visiting the campus several times per week. Lazier estimates that within the three-sided ETA market, demand from investors is highest, followed by interest from MBA students. The supply of available lower-middle-market businesses for sale, notes Lazier, is not increasing, and estimates that some 30% of searchers never find a business to acquire.
Conley says that the ETA club aims to make clear the risks not only of not finding a business, but of being unable to successfully lead the business once acquired. That said, Conley notes that even searchers who do not ultimately become CEO of an ETA-backed business often find related positions in search-owned businesses and at investment firms in need of analytical and due diligence talent.
 
Search Party Lead Sponsor:
Next Coast Legacy ⁠https://lnkd.in/eSAuRW5p
⁠
Search Party Sponsors:
Avidbank ⁠https://www.avidbank.com/⁠
Boulay - Contact Boulay's Search Fund Team: https://lnkd.in/eFF88SVf⁠
Mayer Brown ⁠https://lnkd.in/gU7sPPSg⁠
Plexus Capital ⁠https://plexuscap.com/⁠
Search Party video-podcast website: ⁠https://lnkd.in/efJEa6GV⁠

When Quality-of-Earnings Reveals Cold, Hard Truths

Bob Boniface and his ETA search partner went searching for a high quality, blue-collar business in the lower middle market, and found ⁠TransTech⁠, a commercial driver's license (CDL) training business in North Carolina. The business had predictable revenue and competed in an essential, growing market. The seller was impressed with the research that Bob and his parter had done into the niche industry.
A letter of intent was issued, followed by a quality of earnings process. That's when the uncomfortable conversations began.
Quality of earnings is an early form of due diligence, the importance and utility of which many first time Entrepreneurs-Through-Acquisition (ETA) do not fully appreciate. Sellers, too, can be apprehensive about the process, because in translating cash accounting into accrual accounting, reported revenue and earnings can drop, often followed by a drop in the proposed transaction value, as well.
In a fascinating conversation with Search Party, four expert practitioners from the lower middle market discuss the criticality of quality of earnings, dispel misperceptions and compare notes on best practices for keeping investors apprised of shifting numbers, as well as preventing the seller from experiencing disappointment and due diligence fatigue. Boniface is joined in the Search Party episode by Anthony Walker of Next Coast Legacy, and Clay Brownlee and Ryan Turbes, both of ⁠Boulay⁠.
Boniface details how quality of earnings revealed lower revenue and earnings than originally estimates. This change didn't kill the deal, but it did require the parties to change the deal structure, as well as require the seller to "cross an emotional rubicon" because the purchase price needed to drop.
The experts also discuss expectations around workload and timeline, as well as how a good quality of earnings process can inform and accelerate the post-acquisition plan for value creation. As Boniface puts it, quality of earnings is "something you should really look forward to."
 
Search Party Lead Sponsor: Next Coast Legacy ⁠https://lnkd.in/eSAuRW5p⁠
Search Party Sponsors: Avidbank ⁠https://www.avidbank.com/⁠
Boulay - Contact Boulay's Search Fund Team: https://lnkd.in/eFF88SVf⁠
Mayer Brown https://lnkd.in/gU7sPPSg⁠
Plexus Capital ⁠https://plexuscap.com/
⁠
Search Party video-podcast website: ⁠https://lnkd.in/efJEa6GV⁠

Deal Dynamics in the Lower-Middle-Market: Software, Commercial Services, BPO

Businesses acquired in the lower-middle-market at single-digit multiples of EBITDA can be sold for double-digit multiples, but only if the new owners improve operations and grow earnings, according to three veterans of the Entrepreneurship-Through-Acquisition (ETA) search-fund market.
Multiples arbitrage, seller dynamics, buy-and-build opportunities and market mega-trends are attractive features of three industry sub-sectors discussed in this Search Party episode: software, commercial services and business process outsourcing (BPO).
While competition for deals remains fierce in the software lower-middle-market, there are "riches in the niches," says Anthony Walker, a Managing Partner at ETA private equity firm Next Coast Legacy. Walker notes that ETA searchers need to find software businesses that are growing strongly but also profitably. What many investors, and lenders, are looking for is "the perfect mix" of "healthy EBITDA with healthy ARR," says Conor Tidgwell, Senior Vice President at Avidbank, which provides financings to ETA and other lower-middle-market transactions.
The enormous commercial services sector is benefiting from outsourcing trends among lower-middle-market businesses. But many ETA searchers find these businesses - such as HVAC maintenance, landscaping, restoration - to be uninteresting, opening up opportunities for investors who see value, if not glamor. With the right management, commercial services businesses can be vastly improved improved through the application of sales and marketing resources, as well as the use of technology, says Dustin Sellers, a Managing Partner at Next Coast.
Included in the episode is a discussion of the seller dynamics in the three sub-sectors. In the case of BPO and commercial services businesses, the CEOs often are founders who personally provided the services that serve as the companies' core offerings. These founders may not have the skillsets to take their businesses to the next level, and therefore may be open to an outreach from an ETA searcher.
 
Search Party Lead Sponsor:
Next Coast Legacy https://lnkd.in/eSAuRW5p
 
Search Party Sponsors: Avidbank https://www.avidbank.com/
Boulay - Contact Boulay's Search Fund Team: https://lnkd.in/eFF88SVf
Mayer Brown https://lnkd.in/gU7sPPSg
Plexus Capital https://plexuscap.com/
 
Search Party video-podcast website: https://lnkd.in/efJEa6GV
 

Women in Search are Finding Momentum

Women are making gains toward substantial representation in the Entrepreneurship-Through-Acquisition (ETA) community, and supporting each other along the way. In fact, 17% of ETA searchers in the market are now women. In a fascinating conversation, three ETA leaders compare notes about the appeal of the ETA search-fund career, the advantages women can have connecting with fellow entrepreneurs, and the challenges and misperceptions women confront in a male-dominated industry.
This episode of Search Party includes Audrey Kohout, CEO of ETA company Luggage Forward, Tatiana Gaspar, Director at ETA private equity firm Next Coast Legacy and Katie Walker, a Principal at lower-middle-market capital provider Plexus Capital.
Kohout tells the story of how her and co-searcher/co-CEO Jessica Palfrey looked all over the country for a lower-middle-market business to acquire and run before settling on a logistics company in Boston, owned by two men. A deal was struck due in part to shared values of hard work and humility that transcended gender.
The experts also discussed the often-difficult balancing act of growing a business while also maintaining a personal life and, for women and men alike, growing a family. As Kohout puts it: "We're building our lives at the same time that we're building a company."
Near the end of the conversation, the three compared stories of awkward moments that women can face when men assume they are not in positions of leadership.
 
Women's Search Network: https://www.womenssearchnetwork.com/
 
Search Party Lead Sponsor:
Next Coast Legacy https://lnkd.in/eSAuRW5p
Search Party Sponsors:
Avidbank https://www.avidbank.com/
Boulay - Contact Boulay's Search Fund Team: https://lnkd.in/eFF88SVf
Mayer Brown https://lnkd.in/gU7sPPSg
Plexus Capital https://plexuscap.com/
 
Search Party website: https://lnkd.in/efJEa6GV

ETA Searchers, Grit and Self-Actualization

A career move to the Entrepreneurship-Through-Acquisition (ETA) search-fund market may result in any combination of bewilderment, disappointment, wealth creation and self-actualization, according to A. J. Wasserstein, a Senior Lecturer at the Yale School of Management.
Wasserstein, himself the builder of two successful businesses, has made entrepreneurship and the search fund community the subject of his teaching and academic work. As Search Party learned in a fascinating conversation, Wasserstein has developed frameworks not only about the potential of an ETA career to pave a way to self-determination and wealth, but to personal fulfillment, what psychologist Abraham Maslow calls self-actualization.
Wasserstein, together with Next Coast Legacy Managing Partners Dustin Sellers and Anthony Walker, discusses the growing awareness of the ETA career path among MBA students, the attributes necessary to embark on a high-risk professional journey. Making sure the entrepreneurial path dovetails with personal values and goals is important, says Wasserstein, because he doesn't want his students to end up "the richest divorced people, or the richest people estranged from their kids."
At the center of the self-actualization possible for CEOs of lower-middle-market businesses is the ability to directly and positively impact the lives of employees and other stakeholders, to create an entity bigger than the personal ambitions of the ETA searcher.
 
Select works from A. J. Wasserstein:
Exploring Search Fund Entrepreneur Economics https://yale.app.box.com/s/0mo483h9lmfd04bl1om9dkc7oz4xm2s6
Exploring Search Fund Entrepreneurship Using Maslow's Hierarchy of Needs as a Framework
https://yale.app.box.com/s/gz48z3i3t55oxdzqbxk1ny32v6oq775o
Including Employees in a Search Fund Waterfall https://yale.app.box.com/s/6ouw7vhe9eq6a24y63dy29mjz166o8ht
 
Search Party Lead Sponsor:
Next Coast Legacy https://www.nextcoastlegacy.com/
 
Search Party Sponsors: Avidbank https://www.avidbank.com/
Boulay - Contact Boulay's Search Fund Team: https://lnkd.in/eFF88SVf
Mayer Brown https://www.mayerbrown.com/en
Plexus Capital https://plexuscap.com/

Make Way for ETA: Dustin Sellers and Anthony Walker of Next Coast

Dustin Sellers and Anthony Walker, Managing Partners at leading Entrepreneurship-Through-Acquisition (ETA) investment firm, Next Coast Legacy, share their personal career journeys through the finance industry to become leading practitioners of the ETA strategy, and comment on the exciting growth of the asset class, the attributes necessary for successful searchers, and the rigors of acquiring and running small- and medium-sized businesses.
Dustin, who specializes in mentoring searchers and first-time CEOs, shares the attributes necessary for ETA success, including a willingness to "chew off your own arm" to avoid losing money. He describes the challenge of identifying the right acquisition target as akin to climbing Everest without oxygen, and the challenge of being a first-time CEO as akin to managing while underwater in a scuba suit.
Anthony, a due diligence expert who became "disillusioned" making short-term investments at large hedge funds, talks about his light-bulb moment when he learned about the ETA opportunity for hands-on value creation at small- to medium-sized businesses.
 
About Search Party
Search Party is a video-podcast created to elevate knowledge about the Entrepreneurship-Through-Acquisition (ETA) strategy. On a regular basis, the podcast will convene expert conversations about the best practices and opportunities in ETA, a model for business growth, career development and wealth creation that is becoming increasingly popular.
Search Party is hosted by David Snow and produced by Elatromme.
 
Search Party Lead Sponsor
Next Coast Legacy https://www.nextcoastlegacy.com/
Search Party Sponsors
Avidbank https://www.avidbank.com/
Boulay - Contact Boulay's Search Fund Team: https://lnkd.in/eFF88SVf
Mayer Brown https://www.mayerbrown.com/en
Plexus Capital https://plexuscap.com/
 
Search Party podcast homepage: https://searchpartypodcast.com/
 

Search Party: A New Video-Podcast About Entrepreneurship-Through-Acquisition

Financial journalist David Snow explains the impetus for the launch of Search Party, a new video-podcast featuring Next Coast Legacy Managing Partners Dustin Sellers, Anthony Walker and a rotating roster of expert guests.
On a regular basis, Search Party will delve into topics designed to elevate knowledge of the entrepreneurship-through-acquisition (ETA) strategy, a form of investing, value- and wealth-creation that is increasingly popular, especially across business-school networks.
Search Party topics will include models for the alignment of economic interests, deal-sourcing techniques, due diligence, methods for operational value-creation and financing strategies, among many others.
 
About Search Party
Search Party is a video-podcast created to elevate knowledge about the Entrepreneurship-Through-Acquisition (ETA) strategy. On a regular basis, the podcast will convene expert conversations about the best practices and opportunities in ETA, a model for business growth, career development and wealth creation that is becoming increasingly popular.
Search Party is hosted by David Snow and produced by Elatromme.
 
Search Party Lead Sponsor
Next Coast Legacy https://www.nextcoastlegacy.com/
Search Party Sponsors
Avidbank https://www.avidbank.com/
Boulay https://boulaygroup.com/
Mayer Brown https://www.mayerbrown.com/en
Plexus Capital https://plexuscap.com/
Search Party podcast homepage: https://searchpartypodcast.com/