Self-Funded Search Fund Statistics: The Complete Data Guide for Investors

Contents

1. Search Funds at a Glance: Traditional vs. Self-Funded
2. How to Invest in Self-Funded Search Deals
3. Traditional Search Fund Statistics (Stanford GSB 2024)
4. Self-Funded Search Fund Statistics (SIG 2023)
5. Investor Returns and Economics
6. Capital Structure: How Self-Funded Deals Are Financed
7. SBA 7(a) Loan Statistics for Acquisitions
8. SBA Policy Changes Affecting Search (2023–2025)
9. The Baby Boomer Succession Wave
10. Search Fund Returns vs. Other Asset Classes
11. Important Caveats for Investors

Reliable data on self-funded search is hard to find. The model is newer, the deals are private, and until recently no one had systematically studied the space. This post assembles every major citable statistic we could find — from academic studies, government data, and practitioner sources — into a single reference for investors evaluating self-funded search deals.

Search Funds at a Glance: Traditional vs. Self-Funded

A search fund is a vehicle through which an entrepreneur raises capital to find, acquire, and operate a single small business. The model originated at Stanford GSB in 1984 and has since grown into a recognized alternative asset class.¹

The two dominant models work differently. In a traditional search fund, the searcher raises $400K–$600K in initial search capital from investors, then raises a separate pool of acquisition equity once a target is identified. In a self-funded search, the entrepreneur skips the investor-backed search phase entirely, funding the search out of pocket and raising equity only at the point of acquisition — typically alongside an SBA 7(a) loan and seller financing.²

Metric	Traditional Search	Self-Funded Search
Funds tracked	681 (U.S./Canada, since 1984)3	279 surveyed (SIG 2023)4
Median purchase price	$14.4M3	$1M–$10M4
Median EV/EBITDA multiple	7.0x3	Under 5.0x (83% of deals)4
Aggregate / Median IRR	35.1% (aggregate)3	25–30% (median)4
Capital loss rate	31% of acquisitions3	5% of deals4
Median search duration	19–20 months3	53% close within 12 months4
Searcher equity retained	10–25% common3	60–80%+ common4
Primary debt source	Investor equity + bank debt	SBA 7(a) loan (58% of deals)4

The key takeaway: self-funded deals are smaller, cheaper, faster to close, and show a significantly lower capital loss rate — but the data set is much younger and more limited than four decades of traditional search fund history.

So how do investors actually get access to these deals?

How to Invest in Self-Funded Search Deals

One of the biggest challenges for investors interested in self-funded search is simply finding deal flow. Unlike traditional search funds — where a defined group of investors backs a searcher before the acquisition — self-funded deals come together quickly and quietly, often with equity raised from a small circle of contacts in the weeks before closing.

There are three main channels worth knowing about.

Most experienced investors looking how to invest in self-funded searcher deals use a combination of all three — a syndicate for consistent deal flow, events for relationship-building, and online communities for market intelligence.

To evaluate these opportunities, you need to understand the underlying data. Let’s start with the traditional search fund benchmarks.

Traditional Search Fund Statistics (Stanford GSB 2024)

The 2024 Stanford GSB Search Fund Study, authored by Peter Kelly and Sara Heston and published June 28, 2024, is the gold standard for search fund data. It tracks 681 traditional search funds formed in the U.S. and Canada through December 31, 2023, explicitly excluding self-funded searches, accelerators, and long-term hold models.³

Returns

The aggregate pre-tax IRR stands at 35.1% with a 4.5x MOIC. For exited companies only, the IRR rises to 42.9% and MOIC to 6.9x. However, these headline figures are top-heavy: excluding just the top five performers drops the IRR to 32.6% and MOIC to 3.2x. Roughly 69% of acquisitions generated positive returns, while 31% resulted in losses — two-thirds partial, one-third total. About 8% of deals achieved greater than 10x returns.³

Acquisition Activity

Of concluded searches, 63% successfully made an acquisition (down from 66% in the prior study), with the rate hovering around 57% in any given year since 2014. A record 94 traditional search funds launched in 2023. The median search duration is 19–20 months, with searchers signing an average of 3.6 LOIs before closing.³

Deal Characteristics

The median purchase price reached $14.4 million for 2022–2023 acquisitions (down from $16.5M in 2020–2021), at a median 7.0x EV/EBITDA. Median acquired company EBITDA was $2.2 million with 40 employees and $7.3 million in revenue.³

Ecosystem Scale

Search capital raised grew from $5 million in 2010 to $75 million in 2023. Total acquisition equity volume grew from $110 million to $880 million over the same period, with $682 million deployed in 2022–2023 alone.³

Self-funded deals operate in a different segment of the market. Here’s what the data shows.

Self-Funded Search Fund Statistics (SIG 2023)

The 2023 Self-Funded Search Study, published by Search Investment Group (SIG), is the first and only large-scale study dedicated to self-funded search. It collected data from 279 respondents (of 1,027 invited) surveyed between August and October 2022, of whom 109 had successfully acquired a business.⁴

Target Company Profile

Self-funded searchers acquire smaller companies at lower multiples. The most commonly targeted EBITDA range was $750K–$2.0 million, and 83% of acquisitions closed below 5.0x EBITDA. Enterprise values typically fall in the $1–10 million range, with median revenue of $2.5–5.0 million. Thirty percent of acquired businesses had less than $500K in EBITDA.⁴

Top acquisition sectors were business services (34%), manufacturing (17%), and healthcare (14%), with 65% of searchers pursuing a generalist strategy.⁴

Search Duration and Process

Self-funded searchers close significantly faster than traditional searchers. A full 53% closed a deal within 12 months, and 74% closed within 18 months. Full-time searchers were even faster, with 58% completing within 12 months. Successful acquirers submitted an average of 6.9 LOIs with only 2.4 executed, and fewer than 44% of executed LOIs resulted in a closed deal.⁴

Searcher Demographics

The average self-funded searcher was 35.4 years old at search initiation (median 34), compared to a median of 31 for traditional searchers. While 63% held an MBA (versus ~76% for traditional), backgrounds tilted toward operations and management (43%), sales and marketing (27%), and entrepreneurship (27%) rather than investment banking and consulting. A notable 15% had military backgrounds, only 11% participated in an accelerator program, and 74% searched solo.⁴

In the broader ecosystem, 18% of new searchers in 2023 were female — up from 11% in 2020–2021.³

Searcher Industries

This data is taken from Stanford’s study of traditional searchers, not SIG’s study.

The searcher profile is one thing. What investors really want to know is how the returns look.

Investor Returns and Economics

The SIG study found a median investor IRR of 25–30%, with 39% of investors achieving IRRs of 40% or higher and 33% achieving MOIC of 3.0x or greater. Only 5% of deals destroyed investor capital.⁴

5% — that’s the capital loss rate in self-funded search deals, per the SIG 2023 study. For comparison, 31% of acquisitions in Stanford’s traditional search fund dataset produced negative returns — though that figure includes partial losses and measures a different stage of invested capital.⁴³

An important caveat: because 81% of SIG respondents had acquired within the prior three years, many of these returns reflect unrealized estimated values rather than actual exits.⁴

The Yale Reality Check

The October 2025 Yale SOM study “How are Search Fund Investors Really Faring?” analyzed 1,192 observations from 12 investors across 23 funds and found that no investors in their sample matched the Stanford MOIC benchmarks. Stanford reports an “index” of entrepreneur-reported returns, while actual investor portfolio returns vary based on deal access and capital allocation. Fifty-eight percent of deal-level MOIC observations fell in the 0 to 1.99x range, and only 2% exceeded 10x.⁵

The takeaway: headline IRR and MOIC numbers — for both traditional and self-funded search — should be understood as benchmarks, not guaranteed portfolio outcomes.

Typical Equity Structure

The most common self-funded deal structure uses preferred equity (39% of deals), where investors receive a 6–8% preferred annual return (65% of deals) plus a minority share of common equity. Searchers using preferred equity retained 60–80%+ of common equity in 86% of deals — far more than the 10–25% typical in traditional search. Only 13% of self-funded deals used traditional search fund terms.⁴

Individual investor check sizes typically range from $25K–$100K, with specialized funds investing $250K–$2M per deal.⁶

Those equity checks are only one piece of the capital stack. Here’s how the full deal is typically financed.

Capital Structure: How Self-Funded Deals Are Financed

The canonical self-funded deal follows an “80/10/10” structure: approximately 80% SBA 7(a) senior debt, 10% seller note, and 10% equity.⁷ The SIG study confirmed this pattern — 58% of acquisitions used SBA 7(a) loans, 45% incorporated seller notes, 21% used conventional commercial debt, and 12% used no debt at all.⁴

Seller Note Details

The majority (61%) of seller notes represented 10–20% of the purchase price, carried interest rates of 4.0–7.9% (79% of cash-paying notes), and had a typical term of 5 years (44% of notes). Only 9% were on full standby — a figure that may shift given recent SBA policy changes.⁴

Equity Sources

Some 62% of self-funded searchers raised outside equity, while 38% used purely personal capital. Among those raising equity, sources included personal savings (78%), friends and family (42%), high-net-worth individuals (40%), family offices (17%), and PE or institutional investors (14%). Most searchers contributed modestly: 68% put in less than $200K of personal funds, and 24% contributed less than $50K.⁴

For a representative $4 million deal with 80/10/10 structure, the total equity need is roughly $400K, of which the searcher might contribute $40–80K and investors the balance.⁴

Since SBA debt is the backbone of most self-funded deals, let’s look at the lending data.

SBA 7(a) Loan Statistics for Acquisitions

The SBA 7(a) program is the primary debt engine behind self-funded search. Here are the numbers that matter.

Program Volume

FY2024 saw $31.1–31.5 billion in total 7(a) loan volume across 70,200 loans — the highest loan count in over 15 years, a 22.5% year-over-year increase. Through Q3 of FY2025, the program was on pace to match or exceed those levels, with Q2 FY2025 representing the second-highest quarter in program history at over $10 billion. The program’s outstanding portfolio reached $116.3 billion in unpaid principal by end of FY2024.⁸⁹

Default Rates

1.22% — that’s the average annual default rate for SBA 7(a) business acquisition loans from 2019–2023, compared to 1.64% for non-acquisition 7(a) loans. Acquisition loans default at a lower rate than the program average.¹⁰

However, charge-off amounts have been rising — from $0.49 billion in FY2020 to $0.80 billion in FY2023. FY2024 marked the first year of negative cash flow for the 7(a) program in over a decade, prompting congressional scrutiny around early defaults within the first 18 months.¹⁰

Current Terms

Parameter	Detail
Maximum loan amount	$5 million per NAICS code family11
Repayment term (acquisitions)	Up to 10 years (25 years if 51%+ is real estate)11
Interest rates (current)	~9.75%–14.75% (prime + 2.75%–4.25% depending on size)12
Minimum equity injection	10% of total project costs for complete change of ownership13
Financial covenants	None required10
Personal guarantee	Required from all owners holding 20%+ equity11

Key SBA Lenders for Acquisitions

The most active SBA lenders in the acquisition space include Live Oak Bank (~$1.98B in FY2024, known for acquisition specialization), Newtek Bank (highest dollar volume overall), First Internet Bank (average loan $1.46M, strong for larger acquisitions), and First Bank of the Lake (frequently cited in the search fund community).¹⁴¹⁵

These lending mechanics are shifting. Recent SBA policy changes directly affect how self-funded deals get structured.

SBA Policy Changes Affecting Search (2023–2025)

The SBA regulatory landscape has shifted significantly. Investors evaluating self-funded deals need to understand these changes because they directly affect deal structure and feasibility.

May 2023: The SBA first allowed 7(a) loans for partial changes of ownership. Previously, only 100% buyouts qualified — opening the door to creative acquisition structures and partnership buyouts.¹⁶

December 2024: Multi-step partial changes of ownership with asset purchases were approved, adding further flexibility for staged acquisitions.¹⁷

June 1, 2025 — SOP 50 10 8: The SBA issued a major tightening of lending standards. Collateral is now required for loans above $50K (down from $500K). Seller notes must be on full standby for the entire loan term to count toward the equity injection requirement. The “do what you do” lender discretion policy was eliminated. The 7(a) Small Loan maximum was reduced from $500K to $350K. And the SBA introduced a formal definition of “search funds” that raised concerns in the ETA community.¹⁸¹⁹²⁰

The full-standby seller note requirement is particularly impactful. Previously, seller notes could carry normal payment schedules while still counting toward the 10% equity injection. Now, if a searcher wants the seller note to count, the seller receives no payments until the SBA loan is fully repaid — typically 10 years. This is expected to reduce seller willingness to provide financing on these terms, potentially increasing the equity needed from investors.¹⁸

Despite regulatory headwinds, the macro opportunity remains enormous — and it’s driven by demographics.

The Baby Boomer Succession Wave

The structural tailwind behind search fund deal flow is the retirement of baby boomer business owners.

Between 2.9 million²¹ and 10 million²² baby boomer-owned businesses need new owners. The lower figure (employer businesses with owners aged 55+) comes from U.S. Census data via Project Equity. The higher figure is a broader SBA estimate that includes non-employer businesses and sole proprietorships.

Over 51% of U.S. employer-business owners are aged 55 or older.²¹ Project Equity estimates these 2.9 million employer businesses support 32.1 million employees, $1.3 trillion in payroll, and $6.5 trillion in revenue.²¹ Some 4.1 million baby boomers turn 65 annually through 2027 — roughly 10,000–11,400 per day — the highest rate in American history. By 2030, all 73 million boomers will be 65 or older.²²

The Succession Gap

The Exit Planning Institute’s 2023 survey found that 73% of privately held companies plan to transition ownership within the next decade, and 49% plan to exit within five years. Yet 56–80% of business owners lack a formal succession plan. Only 30% of small businesses successfully sell at time of owner retirement, and the median close rate on BizBuySell was just 6.46% from 2018–2022.²³

The IBBA’s Q3 2025 Market Pulse Survey confirmed that baby boomers make up nearly 60% of current business owners bringing companies to market. Retirement remains the number-one reason for selling at 38% of transactions.²⁴

BizBuySell’s 2024 full-year data showed 9,546 closed transactions (up 5% YoY) with a median sale price of $345,000 and an average cash flow multiple of 2.57x SDE.²⁵

For self-funded searchers targeting the $1–10M enterprise value range, this succession wave creates a persistent supply of motivated sellers — many of whom are willing to provide seller financing because the alternative is often closing the business entirely.

With the macro picture in place, let’s put search fund returns in context against other asset classes.

Search Fund Returns vs. Other Asset Classes

Asset Class	Return Benchmark	Source
Traditional search funds	35.1% aggregate IRR / 4.5x MOIC	Stanford GSB 20243
Self-funded search	25–30% median IRR	SIG 20234
U.S. Private Equity (10-year)	15.25% IRR	Cambridge Associates, Q3 202426
Top-quartile PE (2000–2020)	~22.5% IRR / 2.15x TVPI	Industry estimates26
S&P 500 (historical annualized)	10–12%	Long-term average

These comparisons deserve a grain of salt. The CFA Institute has published analysis showing that PE IRRs are inflated by capital call timing and credit line usage — a typical PE gross IRR of 23% erodes to approximately 11% on a time-weighted basis after fees. Search fund IRRs face similar distortions: the Stanford figure includes operating companies marked at estimated current values, not just realized exits.²⁷

“In search funds, we get similar or better returns at a fraction of the risk we take on in VC portfolios.”
— José Martín Cabiedes, INSEAD²⁸

The self-funded model’s 5% capital loss rate versus traditional search’s 31% loss rate (and venture capital’s well-known power-law distribution) supports this risk-adjusted framing, even if absolute IRR is somewhat lower.

Before drawing conclusions, there are a few things the data doesn’t tell you.

Important Caveats for Investors

The data paints a compelling picture, but investors should weigh three significant caveats.

The self-funded data set is limited. The SIG study is a single survey of 279 respondents with acknowledged self-selection bias. Eighty-one percent had operated for fewer than three years, so many reported returns are unrealized estimates. There is no equivalent of Stanford’s four-decade longitudinal data set for self-funded search.⁴

SBA policy is tightening. The June 2025 SOP 50 10 8 changes — particularly the full-standby requirement for seller notes and expanded collateral demands — may meaningfully alter deal economics. Investors should expect capital structures to evolve.¹⁸

Reported benchmarks may overstate realized returns. The Yale 2025 study found that no surveyed investors matched Stanford’s index returns. The gap between entrepreneur-reported performance and actual investor outcomes is real and underexplored.⁵

Sources & References

¹ Wikipedia, “Search fund.” Source ↩

² Yale School of Management, “Exploring Various Search Fund Structures” (August 2021). Source ↩

³ Stanford GSB, “2024 Search Fund Study: Selected Observations,” Peter Kelly & Sara Heston (June 28, 2024). Case E-870. Tracks 681 traditional search funds in U.S./Canada through December 31, 2023. Source ↩

⁴ Search Investment Group, “2023 Self-Funded Search Study: Selected Observations.” 279 respondents surveyed August–October 2022. Source ↩

⁵ Yale School of Management, “How are Search Fund Investors Really Faring?” (October 27, 2025). Analyzed 1,192 observations from 12 investors across 23 funds. Source ↩

⁶ Searchfunder.com discussion, “What is the average investor check size for a self-funded deal?” Source; Smash Ventures and CapitalPad investor profiles. Source ↩

⁷ The SMB Scoop (Ben Tigg), “Self-Funded SBA Acquisition Structuring Explained.” Source ↩

⁸ AmPac Business Capital, “SBA 7a Lending 2025: Record Volumes and Small-Business Trends.” Source ↩

⁹ Boxwood Means, “SBA 7(a) Loan Volume Accelerated in 2024 with Key Policy Changes.” Source ↩

¹⁰ Yale School of Management, “Exploring and Understanding the U.S. Small Business Administration 7(a) Loan Program” (February 5, 2025). Includes Lumos Data default rate analysis. Source ↩

¹¹ Live Oak Bank, “SBA 7(a) Loans for Business Acquisitions Explained.” Source ↩

¹² NerdWallet, “SBA Loan Rates 2026.” Source ↩

¹³ Pioneer Capital Advisory, “Equity Injection Explained: What Buyers Need for SBA Approval.” Source ↩

¹⁴ Fit Small Business, “10 Best SBA Lenders for Small Businesses in FY2024.” Source ↩

¹⁵ Security Bank & Trust Co., “Self-Funded Search Fund.” Source ↩

¹⁶ First Bank, “Changes to SBA 7(a) Program for Business Acquisitions.” Source ↩

¹⁷ LoanBud, “SBA Loans Update: Flexible Multi-Step Ownership Changes” (December 2024). Source ↩

¹⁸ Phillips Lytle LLP, “The SBA Reverts Back to Stricter Lending Standards.” Source ↩

¹⁹ Whiteford, Taylor & Preston LLP, “Client Alert: SBA Issues SOP 50 10 8: Key Changes Impacting SBA 7(a) Lending.” Source ↩

²⁰ SMB Center, “Breaking: The SBA Just Redefined ‘Search Funds’ And Got It Wrong.” Source ↩

²¹ Project Equity, “2.3 Million Small Businesses Nationwide Owned by Aging Boomers Preparing to Retire.” Based on U.S. Census Bureau data for employer businesses with owners aged 55+. Source ↩

²² Retirepreneur, “Baby Boomer Statistics.” Includes SBA estimate of 10 million boomer-owned businesses. Source ↩

²³ Teamshares, “Succession Planning Statistics in 2025: Preserving a Legacy.” Source; Project Equity, “20 Key Business Owner Statistics on Exits & Succession.” Source ↩

²⁴ IBBA & M&A Source, “Market Pulse Q3 2025 Survey Results.” Source ↩

²⁵ Small Business Trends, “Small Business Acquisitions Rise 5% in 2024, Driven by Higher-Priced Deals” (BizBuySell Q4 2024 Insight Report). Source ↩

²⁶ Moonfare, “Is Private Equity Still Outperforming Public Markets?” Cites Cambridge Associates U.S. PE Index. Source ↩

²⁷ Kaiser Partner, “You Can’t Eat IRR: On Realistic Performance Expectations for Private Equity.” Source ↩

²⁸ INSEAD Knowledge, “Search Funds: A Rising Asset Class Outperforming PE and VC.” Source ↩

²⁹ IESE Business School, “International Search Funds — 2024 Selected Observations.” Source; IESE Insight, “Search Funds Asset Class Maintains Global Growth.” Source

³⁰ Searchfunder.com (via LinkedIn). Source ↩