Search Party

With his entrepreneurship tracing back to charging kindergarten classmates fifty cents for drawing lessons, Jason Williford has spent decades backing small businesses and building a sense of what it takes to lead one. Williford, a board member and executive advisor to Culture Index, tells Search Party that the riskiest small businesses he encounters are led by CEOs who have failed to surround themselves with smart advisors. Among the key takeaways of this Search Party episode: • Culture Index, which Williford has worked with for eighteen years, uses behavioral analytics and non-clinical psychometrics to remove the guesswork from hiring, pairing the science with behavioral-based interviewing to achieve a roughly ninety percent hiring success rate. • ETA searchers face a supply problem: Williford is concerned there are not enough viable deals for the number of people searching, and he worries that desperation near the end of a 12-to-24-month search window leads some to settle for below-average acquisitions. • The most important thing an ETA searcher can do, in his view, is build a board they report to, even if it means giving away equity to attract experienced advisors. • Williford looks for self-awareness above all. If a prospective CEO doesn't own their weaknesses, he won't invest, regardless of their credentials. • Williford believes AI is the current generation's industrial revolution, and he urges small business owners to pursue immediate, practical efficiencies rather than transformative moonshots. Access a full transcript and searchable content archive on the Search Party Substack. Lead Sponsor: NCL Partners https://www.nclpartners.com/ Sponsors: Boulay https://boulaygroup.com/services/search-funds/ Kilpatrick  Townsend and Stockton LLP https://ktslaw.com/ Oberle Risk Strategies  https://oberle-risk.com/landing-page/search-party/ #searchparty #eta #privateequity #entrepreneurship

The ETA search has grown into a more professional asset class over the years, but its reliance on mentorship makes it hard to scale to the size many institutional investors require, says Susan Pohlmeyer, co-founder and partner of Futaleufu Partners, as well as a former investor at the Stanford Management Company.  In a conversation with Search Party, Pohlmeyer explains the fundamentals of the entrepreneurship-through-acquisition asset class that also limit its ability to grow. "The three legs of the stool that make the search model work are: a great industry and company, a talented entrepreneur who can be a great CEO, and investor-mentors. If you take away the mentorship aspect, you don't have a stable stool" she says. Among the key takeaways of this Search Party episode: • The ETA asset class has matured significantly, with dedicated accounting, legal, and lending practices now existing specifically for search funds. But space is still low in institutional capital, with most investors still being high-net-worth individuals and family offices. • Futaleufu Partners evaluates searchers primarily on coachability and their ability to connect with and manage people, not pedigree or prior CEO experience. • Despite more capital flowing into the search world, purchase prices for lower middle market companies have remained relatively stable, because the core inefficiency is structural: illiquid markets with founders nearing retirement, not a lack of buyers. • AI is a significant opportunity for most lower middle market businesses, and good managers will have an edge as technology levels the playing field. • Roll-up and PE-style M&A strategies are appearing more frequently in ETA, but Pohlmeyer believes the core investment should be able to stand on its own without M&A. Access a full transcript and searchable content archive on the Search Party Substack. Lead Sponsor: NCL Partners https://www.nclpartners.com/ Sponsors: Boulay https://boulaygroup.com/services/search-funds/ Kilpatrick  Townsend and Stockton LLP https://ktslaw.com/ Oberle Risk Strategies  https://oberle-risk.com/landing-page/search-party/ #searchparty #eta #privateequity #M&A

Cory Prott, an ETA searcher who acquired and became CEO of HRtoGo, had to engineer a cultural overhaul after discovering he inherited a workforce that had an antagonistic view of their employer. This was one of numerous challenges he faced that an advanced degree in accounting did not prepare himself for, he details in this episode of Search Party.  Joined by Dustin Sellers of NCL Partners and Burton Francis of ECA Partners, the conversation also covers the white-glove service model Prott is building to differentiate HRtoGo in a market crowded with big-box PEOs and self-service tech platforms. The experts describe the importance of self-awareness — knowing what you can and can't do, and hiring accordingly. Among the key takeaways of this Search Party episode: Beware of risks the selling owner didn't tell you about - From employee misclassification to undisclosed balance sheet issues, the risks that can make or break a small business acquisition are often things the selling owner knows about and has no obligation to disclose unless directly asked. Beware of 'over-diligencing' during search - Sellers cautions that a strong M&A or private equity background can actually work against a searcher if it comes at the expense of the fundamentals — cash management, revenue cycles, sales motion and margin — that core accounting teaches and that SME operating reality demands. ETA searchers need 'lower middle market scrapiness' - Francis describes the defining trait his firm looks for in executives placed into ETA-backed companies as a "no project is beneath me, no ask is beneath me" mentality — an attitude that doesn't show up on a resume but tends to show up in people who grew up around small businesses. Many entrepreneurs come from entrepreneurial families - Sellers observes that a disproportionate share of the searchers NCL backs were exposed to the SME world through a family member — an early embedding of awareness that no amount of business school coursework fully replicates. Access a full transcript and searchable content archive on the Search Party Substack. Lead Sponsor: NCL Partners https://www.nclpartners.com/ Sponsors: Boulay https://boulaygroup.com/services/search-funds/ Kilpatrick https://ktslaw.com/ Oberle https://oberle-risk.com/landing-page/search-party/ #searchparty #eta #privateequity #M&A

When ETA entrepreneurs finally reach the exit they've spent years grinding toward, the tax decisions made in that moment can cost them millions — or save them millions.  Boulay Wealth Partner Nathan Faith breaks down the strategies many financial advisors don't know exist, from Flex SMAs that harvest losses, to the Section 1202 exclusion. If you're an ETA searcher anyhere on the journey — buying, running, or approaching an exit — this is the conversation that could change the financial outcome of everything you've worked for. Key takeaways from this Search Party episode: • Some newly wealthy ETA searchers don't know what to make of it. Even the most driven entrepreneurs can find themselves "hyperventilating" over numbers they spent years chasing but never quite believed would arrive, Faith says. • Most post-exit ETA searchers opt not to run another business. According to Faith, most discover that the grind takes enough out of them that they'd rather invest in and mentor the next generation of searchers than saddle up again themselves. • The 'three buckets' for ETA exit wealth. After Uncle Sam takes his cut, your exit proceeds belong in one of three places: taxes owed, an end zone fund sized to support you for life without working another day, and a legacy bucket where you can afford to take real risk again. • How does a Flex SMA offset capital gains? A Flex SMA uses a margin loan to amplify your market exposure, then systematically harvests the resulting losses — in either direction — to offset the capital gain from your exit, potentially sheltering thirty to one hundred percent of your gain in the same tax year you report it. • Entrepreneurs, ask your tax advisor about the 1202 gain exclusion. If you've held stock in a qualifying C corporation for at least five years, Section 1202 may allow you to exit with up to $15 million in profits completely tax-free — and most accountants either don't know it exists or don't bother to check whether you qualify. • Ask your tax advisor about the 'stack and pack' strategy. By distributing shares into trusts established for each of your children before an exit, you may be able to turn a nine-figure exit into a tax-free event. Access a full transcript and searchable content archive on the Search Party Substack. Lead Sponsor: NCL Partners https://www.nclpartners.com/ Sponsors: Boulay https://boulaygroup.com/services/search-funds/ Kilpatrick https://ktslaw.com/ Oberle https://oberle-risk.com/landing-page/search-party/ #searchparty #eta #privateequity #tax

Chris Sigala took an unconventional path through ETA — no MBA, no traditional search fund syndicate, and a relatively brief search in a very specific healthcare niche. Sigala has now completed an ETA round trip, having sourced and acquired Renvio - which serves dialysis clinics by streamlining how they operate - led it it as CEO, and exited to a financial partner.  Sigala shares his journey in a fascinating conversation featuring Anthony Walker, a General Partner at NCL Partners, Brian Axelrad, a Partner at Kilpatrick, Townsend and Stockton, and Search Party host David Snow. Among the highlights of the conversation: • As a former private equity professional who had spent years evaluating small software businesses from the outside, Chris eventually decided he wanted to run one • Sigala acquired two companies simultaneously and merged them on a single closing day, an opening move that not every ETA searcher should attempt, according to Walker and Axelrad. • Whereas in days past, ETA searchers were more likely to cast a wide net, today's ETA searchers increasingly arrive with a specific industry thesis. Sigala's vertical software focus gave him a clear edge over larger firms that couldn't efficiently deploy capital at that scale. • When Chris sat down with the owners of the dialysis software company he was trying to acquire, he brought his father — a nephrologist — to the meeting, turning a business negotiation into a conversation among people who genuinely shared a passion for the space, and winning the deal in the process. Access the transcript and a searchable content archive at the Search Party Substack: https://open.substack.com/pub/searchpartychannel/p/chris-sigala-left-private-equity?r=4tj90q&utm_campaign=post-expanded-share&utm_medium=web Search Party Lead Sponsor NCL Partners https://www.nclpartners.com/ Search Party Sponsors: Boulay search fund team https://boulaygroup.com/services/search-funds/ Oberle Risk Strategies https://oberle-risk.com/landing-page/search-party/ Kilpatrick, Townsend & Stockton https://ktslaw.com/ #searchfunds #ETA #entrepreneurship #womeninbusiness #privateequity #sme #investing #deals #searchparty