Good Bones: Saving a $3m Business in Decline

So, so, so this, so I graduated 2007, so 2005, and I did my MBA, but I, I just wanted to clear that point. I did not know anything about search funds during my mba, despite being really good friends with Mark Egan. You know, okay, yeah, so I just went and ran a business in India, did really well, came back.

But I, you know, I ran into somebody who had raised a search fund and got to know about the model and then ended up actually raising a search fund. And then I, you know, sort of ran a search for two and a half years, did not find a company, but did not find a company to acquire. Just to make sure I'm clear on that, I had like almost, you know, 11 Lois that I executed.

I actually spoke to Bill Egan after coming back in 2010 11, saying, hey, what should I do? And he still, he didn't talk about search funds. And, and then, so like, you know, I, you know, I sort of accidentally got to know about a search fund model and I find this fascinating today when I reflect on it because it's like, despite knowing all these guys in this space, I myself did not know anything…

There's a lot of businesses that I liked, but I, you know, either did not choose to close on them myself or for whatever reasons I found in the due diligence and so on. But there was a business that I liked a lot and we did not do a transaction together, but the founder asked me to come in, become a CEO.

Yeah, well, let's pause here himat because there's some follow up questions I want to ask and I want to hear in some detail about your experience at Circle of Life. This Incredible. Run not as owner, not as he, as operator.

But first your observation that even having been exposed to Bill Egan via his son, having been at Wharton, coming back from India, having operated a successful, successfully operated a quite large P L there, reconnecting I guess with the Egans and, and, and yet not being told or you know, told to go do a search fund, encouraged to go do a search fund. Is there anything to that?

Or it's just weird happenstance that you didn't hear about it from them?

I think it's, it's, it's, it's, it's sort of like it's. I think when I look at it, I think it is. It was still a very small subsection of people who did search funds.

And I think the original investors like Bill Egan expected people to sort of learn about the model themselves and come out and reach out. So when, when I finally raised a search fund, the Stanford study had said in 2013 that only 150 search funds had been raised. So ever since Grossbeck came out, came up with the model originally at Stanford in the mid-80s or whenever that was, between that and…

So I, I think like, you know, so from, you know, so original investors sort of expected people to be really sort of knowing what the model is and to reach out to them. It was a very small sort of a club of people who were in it. And, and I, so I find that fascinating because today it's like, you know, it's, it's a lot more pervasive. The model.

Yeah. You know, well, a guy like Bill Egan who as you said came from private equity, he probably had a lot of Wharton grads reaching out to him, being like, what should I do with, you know, as the next chapter of my career? And so he probably, you know, we're, we are all very search fund focused, but he probably was looking at the, at the full buffet of possible options ahead of somebody.