Key Takeaways
- • Search funds and alternative financing structures are enabling non-traditional dealmakers to acquire small and midsize businesses (HVAC, plumbing, specialized manufacturing) without institutional capital, bypassing the traditional private-equity path from analyst to managing director.
- • Financing is cobbled together deal-by-deal using SBA loans, specialized investors, family offices, friends-and-family capital, and SBA-licensed small-business investment companies, rather than raised institutional funds typical of conventional PE firms.
- • Bakari Akil exemplifies this trend: a homeless college dropout in 2015 who discovered search funds through a Harvard Business School case study and leveraged the model to build wealth, demonstrating accessibility of the strategy to unconventional founders.
- • Deal execution involves significantly lower valuation multiples than large PE shops but demands higher operational complexity and "brain damage," according to Eli Albrecht, an attorney who founded a 2024 law firm specializing in these transactions after representing major PE firms at Gibson Dunn.
- • This wave of independent dealmakers represents a structural shift in small-business acquisition, with participants described as "homesteaders of the Wild West" pursuing ownership outside traditional institutional frameworks.
Summary
A growing cohort of entrepreneurs is circumventing traditional private-equity career trajectories to acquire and operate small and midsize businesses through alternative financing mechanisms and search-fund models. Rather than following the institutional path from analyst roles to managing director positions at established PE firms, these dealmakers are independently sourcing acquisitions in sectors including HVAC, plumbing, and specialized manufacturing, then securing financing through unconventional channels.
Bakari Akil's trajectory exemplifies this emerging pattern. After dropping out of college and experiencing homelessness—sleeping in WeWork locations, on subways, and in airport terminals—Akil consumed personal finance content voraciously before discovering a Harvard Business School case study documenting how MBA graduates used search funds to acquire companies. This discovery catalyzed his entry into the space, positioning him as part of a wave of young founders successfully building substantial wealth outside institutional structures.
The financing architecture supporting these deals differs fundamentally from traditional private equity. Rather than raising committed institutional capital upfront, these dealmakers assemble financing on a transaction-by-transaction basis, drawing from U.S. Small Business Administration loans, specialized investors, family offices, friends-and-family networks, and SBA-licensed small-business investment companies. This decentralized funding approach demands significant operational sophistication and risk tolerance.
Execution complexity remains substantial despite lower acquisition multiples compared to institutional PE. Eli Albrecht, an attorney who founded a law firm in 2024 specifically to serve this dealmaker segment after representing major PE firms at Gibson Dunn, characterizes the operational demands as significant "brain damage." The lower valuation multiples these independent buyers pay for targets are offset by hands-on operational burdens and execution risk. Albrecht frames these participants as "homesteaders of the Wild West," highlighting their role in opening acquisition opportunities in smaller asset classes previously underserved by institutional capital.
Bakari Akil's trajectory exemplifies this emerging pattern. After dropping out of college and experiencing homelessness—sleeping in WeWork locations, on subways, and in airport terminals—Akil consumed personal finance content voraciously before discovering a Harvard Business School case study documenting how MBA graduates used search funds to acquire companies. This discovery catalyzed his entry into the space, positioning him as part of a wave of young founders successfully building substantial wealth outside institutional structures.
The financing architecture supporting these deals differs fundamentally from traditional private equity. Rather than raising committed institutional capital upfront, these dealmakers assemble financing on a transaction-by-transaction basis, drawing from U.S. Small Business Administration loans, specialized investors, family offices, friends-and-family networks, and SBA-licensed small-business investment companies. This decentralized funding approach demands significant operational sophistication and risk tolerance.
Execution complexity remains substantial despite lower acquisition multiples compared to institutional PE. Eli Albrecht, an attorney who founded a law firm in 2024 specifically to serve this dealmaker segment after representing major PE firms at Gibson Dunn, characterizes the operational demands as significant "brain damage." The lower valuation multiples these independent buyers pay for targets are offset by hands-on operational burdens and execution risk. Albrecht frames these participants as "homesteaders of the Wild West," highlighting their role in opening acquisition opportunities in smaller asset classes previously underserved by institutional capital.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.