2026 Search Fund Study: Selected Observations
Peter Kelly, Stefanos Zenios, Dom Ng. (2026)
Stanford GSB Case E-967, 30 pp
Latest edition, dated June 30, 2026; data through December 31, 2025. Sample: "862 core search funds launched since 1984, representing 99% of known search funds in the United States and Canada" (p1), defined as funds "led by a first-time search entrepreneur and funded in the search phase by multiple investors" (p2); 181 new qualifying funds confirmed from over 800 candidates; "we've captured updated outcomes for 97% of known search funds" (p2). Headline: "For all search funds, aggregate IRR was 33.9% and ROI was 4.75x as of December 31, 2025" (p7), versus 35.1% and 4.5x in 2024; exited funds "IRR was 39.3% and ROI 5.98x" (p8); "The overall acquisition rate for all search funds that have concluded stands at 58%. For funds that started between 2021-24 and concluded ... that rate was 48%" (p5); 2024-25 median purchase price $16.0M at 6.2x EBITDA (p6, Exhibit 4 p23). Concentration is quantified: "Returns excluding funds returning 10x ROI or greater: 2.8x ROI (versus 4.75x) and 27% IRR (versus 33.9%)" and "excluding the top 10% of funds by ROI: 2.1x ROI and 20% IRR" (p10); "of the 58% of concluded search funds that acquired, 74% reported some gain in value" (p11); adds a public market equivalent of 2.88 (p11) and first data on 67 long duration enterprises, for which no returns are calculated (p18). Limits stated: "Entrepreneurs self-report fund details, acquisitions, and outcomes"; trends are shown "without limiting our analysis to those that meet conventional thresholds of statistical significance" (p2); returns are "aggregate cash flows ... not an average of individual fund-level returns" (p7 fn 5); findings "may vary from the experience of an individual investor" (p3). Exhibit 12 (p29) lists the authors of every edition back to 1996.