Can a search fund become a public company?

Can a search fund itself go public?

In the traditional form, no. Investors fund a search budget, the searcher buys one company, and the investors and searcher share the equity. The usual end is a sale or a long hold. The legal update from Fredrikson & Byron (November 2025) lists exits as a direct sale, a public offering or another liquidity event, such as dividends or investor buyouts. A public offering is named, but it is the exception.

The numbers explain why. The Stanford GSB summary of the 2026 Search Fund Study reports a median purchase price of $16 million for 2024–25 acquisitions. A company of that size can be sold to a larger owner with far less cost than a listing. The same study reports long-duration enterprises separately for the first time. Holding a company for the long term is not the same as listing it.

For the study figures in full, see What percentage of searchers actually buy a business?.

What are the ways a search-fund company can end up public?

There are three, and they differ in who owns the public company.

• The searcher builds a holding company and lists it. The first company becomes the first subsidiary. Later acquisitions go under a parent, and the parent lists by direct listing, reverse merger or IPO. The routes are compared in What are the ways a holding company can go public?.
• The searcher joins a public company that runs searches. Kingsway employs searchers and lists the parent, so the searcher never has to list anything. The model is covered in How does a public company run a search-fund program?.
• The company is sold to a public buyer. The investors and searcher are paid in cash or stock. This is an exit, not a listing.

Only the first route is a search fund becoming public. It also needs the investors’ agreement, because their preferred terms and exit expectations were written for a sale. See ETA, search fund, independent sponsor or holding company for how those structures differ.

What does a listing require?

Mostly audited numbers and a market that will hold the shares. As of October 2026, the Nasdaq Capital Market requires a $4 minimum bid, 300 round lot holders, 1,000,000 unrestricted publicly held shares and $15 million of market value in unrestricted publicly held shares, plus one of three financial standards. The details and the October 2026 changes are in What does Nasdaq require in 2026?. The OTCQB sits lower and is described in Can a small holding company go public?.

Either market needs PCAOB-audited statements. A company that has made acquisitions may also need audited statements of what it bought; see When do you need audited financials for an acquisition?. Then comes the annual cost of being public, covered in What does it cost to go public and stay public?.

Worked example: can one search-fund company carry public costs?

These are assumptions, not data from a real company. Take the $16 million median price for 2024–25 deals and the 7.0x EBITDA median purchase multiple that the 2024 Stanford study reported for 2022–23 acquisitions. The two figures come from different periods, so pairing them is itself an assumption. Earnings before interest, taxes, depreciation and amortization would be about $2.29 million ($16.0M / 7.0). Assume public costs of $500,000 a year for audit, legal, reporting and insurance. That is about 22% of EBITDA ($0.5M / $2.29M) before any debt service.

A holding company with three such businesses would earn about $6.9 million, and the same $500,000 would be about 7%. That is the practical reason to wait for more than one deal. The listing cost does not scale with the number of businesses, but the earnings that pay for it do.

Who should not try this?

• A searcher with one company, investors who expect a sale and no second deal in view.
• A company whose books cannot yet pass an audit.
• A company that would need the listing to raise cash for basic operations.

If none of those fit you, the next step is to learn how the one listed example operates.

Where these numbers come from: Search fund acquisition rate, price and the long-duration enterprise category come from the Stanford GSB summary of the 2026 Search Fund Study. The 7.0x median multiple for 2022–23 acquisitions is from Exhibit 5 of the Stanford GSB 2024 Search Fund Study. Exit options are from Fredrikson & Byron. The Kingsway statement is from its May 2026 Form 8-K release and its FY2025 Form 10-K. Nasdaq figures are from Listing Rule 5505 as summarized in our linked article. The $500,000 cost is an assumption.

Related questions

Do search fund investors have to approve a listing?

It depends on the investor agreement. Their governance rights and preferred terms were usually written with a sale in mind, so a listing changes their exit. Read the investor agreement and ask a securities lawyer before you plan one.

Is a public holding company with a search program the same thing?

No. In that model the public parent employs the searcher and owns the business. The searcher holds equity in the subsidiary, not in a stand-alone search fund.

Can a self-funded searcher go public?

The route is the same. The company needs audited books, earnings and a plan for more acquisitions. SBA-financed companies also carry lender covenants, so check your loan documents before changing the ownership structure.

What comes next

To see how a listed company runs searches, read How does a public company run a search-fund program (Kingsway KSX)?.

Related articles

• How does a public company run a search-fund program (Kingsway KSX)?
• From one acquisition to a listed serial acquirer: what are the milestones?
• What percentage of searchers actually buy a business, and how do the returns turn out?
• ETA, search fund, independent sponsor or holding company: what's the difference?
• Should a holding company go public, and at what size?

Meraki Dealmakers is a service of Meraki Partners, LLC, an advisory firm. It is not a broker-dealer, investment adviser, business broker, law firm or accounting firm. This article is general information, not legal, tax or investment advice.