Entrepreneurship for chickens. Cluck yeah.
If you cannot or do not get an ivy league MBA, a very good runner-up is a brother with one. I call this MBA adjacent, and I’ve been mooching off his network, knowledge and worldliness for more than a decade. From him I learnt of the world of Search Funds.
What we used to call people wearing their pajamas all day trying to figure out their next move? The folks at HBS crowned them searchers. That reframing from ‘Looking’ to ‘Searching’ can come with a $200k salary and a lot of support if you’re tapped into the right system. Leave it to the Ivys to dress up unemployment and call it Search. With a Capital ‘S.’
We were chatting through a deal I was looking at, and he asked “Are you doing this through a Search Fund?” An innocent enough question if you’re immersed in the jargon of Harvard, Wharton and Stanford. Which I was not. “Search fund?” “Yeah, people pay you to search and then take equity in the company you buy.” Here I was, searching like an idiot, for free.
Fast forward to today and I am fresh back from the Wharton ETA (Entrepreneurship Through Acquisition) Summit. I know, when I see ETA I also think Estimated Time of Arrival. But isn’t part of this whole journey letting go of some of that? We’ll arrive when we arrive dammit.
We are after all, called ‘Searchers’ in this business, and damned if that doesn’t just describe my soul. It sure felt appropriate to have a little lanyard with my name and ‘Searcher’ emblazoned underneath.
Sitting next to an exited CEO at the Women’s Search Network breakfast, I asked her what brought her into Entrepreneurship through acquisition?
‘Entrepreneurship for chickens?’ She asked. Thinking she had misheard, I repeated the question. She had heard fine.
“This is a way for people with lower risk tolerance to experience the buzz of entrepreneurship” she said. As someone who did entrepreneurship the ‘not for chickens way’, the -for people who like to run headfirst into a freight train way- I think that’s rather harsh and that the chicken version is pretty great. Because doing something the harder, longer way isn’t necessarily better. Like at all.
Let’s go back to last September, when I was looking at a marketing agency for sale, close to where I live. Female owned, super profitable, it seemed like such a great fit. I was CMO of a consulting firm at the time so the day to day operations of the biz were identical to my own and I had the history to demonstrate that. I spent many hours reviewing diligence materials, and brought in three other people to hear their perspective. My long term Hubspot (CRM) consultant analyzed the business and sent me a detailed report; “ The apparent shift from FTE/salaried to operational expenses, while good for margins, would make me question what is the asset you are really buying here?” Gulp.
My nephew, an AI wiz, was more blunt; “Sure, you should buy this! If you want to buy a charming little bookstore right before Amazon launches.” Both stinging concerns. Neal Jacobs (Maven Equity Partners) put it differently when he talked about how ETAs should spend months trying to kill a deal, keeping only those mutants that resolutely refuse to die.
But here’s the hard part, In the end, we pick the advice that resonates with the outcome we want. The most scathing review is easily overcome if you’re in love, feeling kismet or as Shakespeare would have it: “I’ll look to like, if looking liking move.” Something about the idea of the ‘morning after’ with the marketing agency made me depressed. Although the margins are great and they boasted impressive customer retention, and though I loved that it was local and proudly women-led and I could do the day to day leading and running of operations in my sleep, I felt inexplicably queasy about the lifestyle of being a marketing agency owner (It didn’t align with my career identity ) and was looking for an out. To be allowed to not love this one. Even if the numbers made sense. So when my trusted advisors presented reasons to kill the deal, I was relieved. And I did.
Angela Duckworth of ‘Grit’ fame, presented in a fireside chat at the conference. One of the questions she was asked was, “When to grit and when to quit?” After all, surely no deal is better than a bad deal. In order to make the decision to move forward with a deal that has ‘hair’ (And they all do), it’s important to create a matrix for decision making and lean into some tools. Sabotaging your options is, for most people, the first part of how they quit things. Meaning, if youve decided, deep down, based on your gut, that a deal isnt for you, you’ll quickly find evidence to support that. So how to keep yousefl honest?
“Never underestimate the inclination to bolt.” — Pema Chodron
Otherwise you can go crazy studying other peoples reactions and reacting yourself. Here’s what helped me:
If you’re wondering when to throw in the towel, don’t just go with your gut — give yourself a proper process.
- Listen to your own voice of resistance and itemize the contributing factors to that voice.
- Do something about the resistance, take actions that could try to support or supplement those concerns and see if it abates.
- And the trickiest part, until a decision is reached, move forward with the deal as though you’re committed. Have the calls, go to the meetings, do the dilligence.
Deciding to quit isn’t just about feeling a bit of resistance. By following a structured process, you’ll gain insights that are far more valuable than the final decision itself.
