Mayfaire Row Research Division
Data-driven analysis on ETA, search fund investing, small business acquisition, and the markets searchers operate in. Written by practitioners, not academics.
Self-funded search is one of the highest-returning corners of private equity most investors have never heard of. Here is how deal flow actually works, what you are underwriting, and how to position yourself to see quality opportunities.
Inherited pricing is almost always below market. Most sellers avoided raising prices because they feared losing customers. Here is the data on price elasticity in small businesses and how to capture value you already own.
ETA investors evaluate dozens of operators before backing one. Here are the questions they ask in every first conversation, what they are really trying to learn, and how prepared operators answer them.
European search funds are growing fast but face distinct structural challenges — financing gaps, seller unfamiliarity, and fragmented legal environments. A country-by-country breakdown for searchers and investors considering European ETA.
Latin America — led by Mexico — now has more search fund exits than any other international region. A practical guide to the LatAm ETA ecosystem, why Mexico is leading, and what searchers and investors need to know about Brazil, Colombia, Chile, and Argentina.
Australia, Singapore, Japan, and India represent the frontier of international ETA. Each market has distinct characteristics — from Australia's mature M&A ecosystem to Singapore's role as an ASEAN deal hub to Japan's unprecedented succession crisis. A practical guide for searchers and investors.
A data-driven breakdown of the 2024 Stanford GSB Search Fund Study — 35.1% aggregate IRR, 4.5x MOIC, return distributions, and what the numbers mean for both searchers and investors evaluating the asset class.
The MBA is not a prerequisite for ETA. More self-funded searchers than ever are coming from military, trades, operations, sales, and technology backgrounds — and closing deals. What matters to investors if you don't have a business school credential.
Whether you buy assets or stock determines your tax basis, your liability exposure, and potentially hundreds of thousands of dollars in outcome. Here is how to evaluate the choice and negotiate it.
The search process is harder, longer, and more isolating than most guides describe. A month-by-month account of what self-funded searchers actually experience — including the psychological challenges, the outreach volumes, and the moments where most searches stall.
An estimated 12 million Baby Boomer-owned businesses — representing $10 trillion in assets and 25 million jobs — will need new owners in the coming decade. What this means for ETA searchers and the investors who back them.
The Letter of Intent is the most important document you will write before the purchase agreement. A practical guide to what goes in an LOI, which terms are negotiable, what to fight for, and the mistakes that cost searchers deals at the LOI stage.
Industry selection is one of the most consequential early decisions in a self-funded search. A data-driven guide to the sectors where ETA acquisitions succeed most often — and the red flags that should make you walk away from an otherwise interesting industry.
R&W insurance has become standard in mid-market M&A — but most ETA deals are too small to access it. Here is where the floor is, what coverage looks like when available, and what to use instead.
SBA 7(a) loans are the primary financing vehicle for most ETA acquisitions. A complete guide to current rates, terms, approval rates, and how to use SBA financing effectively in a search fund deal — using FY2024 program data.
Most small businesses run on a patchwork of outdated software, unmanaged data, and informal cybersecurity practices. Finding these issues before close determines whether you pay to fix someone else's technical debt.
Most acquisitions succeed or fail in the first 90 days. The decisions a new owner makes immediately after close — on team, operations, customers, and culture — set the trajectory for everything that follows. A practical playbook from ETA practitioners.
The 2024 IESE International Search Fund Study tracks 320 funds across 40 countries. A data-driven breakdown of international ETA returns, market maturity, and what non-US searchers need to understand before raising capital.
Most ETA models are either too simple to catch real risks or too complex to update quickly. Here is how to build a model that is decision-quality — the inputs that matter most, and the outputs investors actually read.
A Rollover for Business Startups lets you use retirement funds as acquisition equity without the 10% penalty or immediate tax hit. Here is how it works, what it costs, and the risks most advisors don't tell you.
A data-driven case for ETA co-investment — 35.1% aggregate IRR, 4.5x MOIC, low public market correlation, and structural tailwinds from the Boomer succession wave. What sophisticated investors need to evaluate before allocating to this asset class.
The metric you use to value a business determines the multiple you pay — and most sellers switch frameworks mid-negotiation. Here is when to use each and why it matters.
Healthcare services is one of the highest-growth ETA sectors — but also the most regulatory-intensive. Here is which sub-sectors work for searchers, what multiples look like, and what compliance diligence you cannot skip.
Most ETA operators think about exit too late. The decisions that maximize exit value are made in year one — before the M&A banker is ever called. Here is the framework for building to exit from day one.
Most small businesses are more dependent on their owner than the seller will admit. Here is how to quantify key person risk, what lenders actually require, and the transition structures that protect you.
Operator quality is the single most important variable in ETA investing. A framework for evaluating searchers — background, capital commitment, deal thesis, industry fit, and the character signals that matter more than any credential.
A QoE report is the single most important diligence document in a small business acquisition. Here is what it covers, what it typically uncovers, and how to read one.
Brokers represent sellers, not buyers. Understanding how they are incentivized, how to read their marketing materials critically, and how to negotiate on a brokered deal gives you an edge most buyers ignore.
SBA loan rates are tied to prime, which has moved 525 basis points since 2022. Here is exactly how rate changes affect DSCR, purchase price, and returns — and which deal structures hold up under rate pressure.
A data-driven breakdown of acquisition multiples across sectors, EBITDA bands, and deal structures for self-funded ETA searchers. What the market is pricing, where value exists, and what red flags look like.
A non-compete is only worth as much as a court will enforce. Here is what terms are reasonable, which states are hostile to enforcement, and how to protect yourself if the seller reopens next door.
Seller notes appear in the majority of small business acquisitions. Understanding their structure, typical terms, and subordination mechanics is essential before you sit across from any seller.
Most buyers under-scope legal diligence and pay for it post-close. Here is the complete legal review framework — contracts, litigation, IP, real estate, regulatory — and what to prioritize by deal type.
Employment law violations, unfunded PTO, worker misclassification, and WARN Act obligations are among the most common post-close surprises in small business acquisitions. Here is what to find before you close.
The highest-returning ETA outcomes increasingly come from operators who do not stop at one acquisition. Here is how buy-and-build works, what the return data shows, and how to plan for it from day one.
Customer concentration is the most commonly cited deal-killer in lower-middle-market acquisitions. Here is the data on what thresholds trigger lender and investor concern and how to structure around it.
Manufacturing is consistently overlooked by ETA searchers intimidated by capital intensity. But niche manufacturers with stable customers and specialized capabilities often offer the best value in the lower middle market. Here is the data.
Home services is the most popular ETA sector for a reason — recurring revenue, fragmented competition, geographic defensibility, and strong DSCR characteristics. Here is the full analysis of what deals look like and what to pay.
Operator compensation is a key assumption in every ETA model — but few people publish real numbers. Here is what searchers actually earn in years 1–5, how it compares to pre-acquisition comp, and what investors expect.
Cap table mechanics determine how much of your business you actually own at close, post-dilution, and at exit. Most searchers learn this too late. Here is the full equity math.
A well-built advisory board gives you domain expertise, deal credibility, and network leverage without the governance overhead of a formal board. Most operators get this wrong. Here is what works.
B2B services — accounting, IT managed services, staffing, marketing, consulting — is the most common ETA category. The multiples vary widely based on one primary factor. Here is the full sector breakdown.
The ETA community talks a lot about successes. The failures are more instructive. Here is what the data says about failure rates, the most common causes, and the warning signs you can catch in diligence.
Every seller inflates adjusted EBITDA. Some add-backs are valid. Many are not. Here is how to evaluate them line by line and what forensic accountants actually flag.
Mezzanine debt fills the gap between senior debt and equity in larger ETA deals. Most self-funded searchers never need it — but for deals above $5M, understanding mezz can make or break the capital stack.
SBA covers the debt. But where does the equity come from? Most self-funded searchers need $150K–$500K in equity co-investment. Here is how to find it, structure it, and close on your timeline — not an investor's.
Most seller transitions are vague, unstructured, and end too soon. Here is how to design a transition that genuinely transfers relationships, knowledge, and operations — not just access to the QuickBooks password.
Everything a first-time entrepreneur-through-acquisition needs to know about the self-funded search model — from structuring your search to closing your first deal. Written by practitioners, not academics.
Proprietary deal flow comes from direct outreach — not brokers. Here is how to run an effective off-market sourcing campaign, what response rates to expect, and how to get owners to respond.
A search is a sales process. The operators who close great deals run systematic pipelines — not mental notes and spreadsheet chaos. Here is the CRM setup, stage definitions, and tracking discipline that works.
Most investment memos are too long, too optimistic, and too vague about risk. Here is exactly what ETA investors look for, what signals credibility, and what immediately kills a deal pitch.
Your first hire post-close either buys back your time and builds the management layer you need — or adds cost and complexity without leverage. Here is how to define the role, recruit for it, and set it up to succeed.
The working capital peg is one of the most contentious post-LOI negotiation points in small business acquisitions. Here is how it works, what a normal target looks like, and where disputes happen.
The first year after close is when most cash flow surprises occur. Unfunded liabilities, deferred capex, slow collections, and seasonal gaps kill businesses that were profitable on paper. Here is how to survive it.
Earnouts bridge valuation gaps but create incentive misalignments and litigation risk. Here is when to accept one, how to structure it, and the clauses that protect you post-close.
Preferred return, European waterfall, LP economics, management carve-outs — a clear explanation of the equity terms that govern search fund deals, and what is market vs. what is not.
The SBA approved $27.5B in 7(a) loans in FY2024 — but denial rates for acquisition loans are higher than most searchers expect. Here is what kills applications and how to address each issue.
Two businesses with identical EBITDA can have valuations that differ by 2x or more based purely on revenue model. Here is the data on how recurring revenue premiums work and what actually counts as "recurring."
A practical due diligence framework for self-funded ETA searchers — from financial analysis to customer interviews, legal review, and operational assessment. What experienced investors check that first-timers miss.
The best acquisition deals for self-funded searchers never reach a broker. A practical guide to off-market sourcing — direct outreach, network leverage, digital tools, and the systems that produce consistent deal flow.
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