Search Fund Pitfalls – What First-Time CEOs Should Look Out For

Are you looking to acquire a business, start a search fund, or step into the CEO role for the first time? In this episode, Thomas Bühler, one of the most experienced search fund and ETA investors, shares his perspective on the realities of search funds and the critical first year after an acquisition.

We discuss why many searchers never close a deal, the myth of the “perfect” acquisition, and the realities of working with investors, negotiating seller notes, and managing hidden due diligence risks such as customer concentration. We also talk about what it takes to become a strong CEO and how to handle the often challenging transition period when the original founder remains involved for too long.

Whether you are an aspiring entrepreneur, an active searcher, or a newly appointed CEO, this conversation is full of practical insights to help you navigate the search fund journey successfully.

Link to the IESE Search Fund Findings
Part 1: https://www.iese.edu/media/research/pdfs/ST-0680-E
Part 2: https://www.iese.edu/media/research/pdfs/ST-0681-E

00:03 - Introduction
01:00 - Why Most Searchers Fail to Close a Deal
05:35 - The Ideal Number of Investors for a Search Fund
07:21 - The Myth of the "Perfect" Search Fund Deal
09:14 - The Importance of a Strong CEO
10:08 - How to Work Effectively with Investors Early On
13:23 - The First Year as CEO: Managing People & Change
17:25 - Balancing Learning vs. Changing the Business (The First 90 Days)
18:31 - Common Mistakes: When the Seller Sticks Around Too Long
20:43 - Negotiating Seller Notes & Bank Involvement
25:02 - Where Searchers Should Spend Their Time in the First 6 Months
25:58 - Best Practices for Working with Your Board
29:01 - Early Warning Signs of Poor Company Performance
30:29 - How to Manage and Motivate Employees After a Takeover
34:23 - The Most Underestimated Due Diligence Risk: Customer Concentration
38:38 - Final Advice for New Searcher CEOs