What percentage of searchers actually buy a business, and how do the returns turn out?

How many searchers actually buy a business?

A little more than half. The 2026 Stanford study, published in July 2026 with data to the end of 2025, tracks more than 850 core search funds in the US and Canada since 1996. Its aggregate acquisition rate is 58%.

Recent funds are tracking a little lower so far. About half of the funds launched from 2021 to 2024 had acquired a company by the end of 2025. Some of those funds are still searching, so that number can still rise.

The search is long. Acquisitions in the study typically took about 20 months. The median purchase price for 2024–25 acquisitions was $16 million, and the most common industries were services, software and education.

How do the returns turn out once a company is bought?

In aggregate, very well for investors. The 2026 study reports a 33.9% pre-tax IRR and a 4.75x return on invested capital across the whole asset class.

The distribution tells a different story for any single deal. The 2024 Stanford study, with data to 2023, sorted acquired companies by the return they produced for investors:

• 8% returned more than 10x.
• 17.5% returned 5–10x.
• 25% returned 2–5x.
• 18.5% returned 1–2x.
• 20.5% lost part of the investment.
• 10.5% lost all of it.

So about half of acquired companies returned 2x or more. Almost a third lost money. The aggregate return is high because the top quarter returned so much.

Why do the aggregate returns look better than the typical outcome?

Three reasons.

• Winners carry the average. One deal returning more than 10x offsets several losses in a pooled number. The aggregate IRR measures the asset class, not the median searcher.
• Investors diversify. Searchers do not. The 2024 study counted about 16 investors per deal. An investor can spread money across several searchers. A searcher gets one deal.
• The figures measure investor returns. They are not the searcher's outcome. A traditional searcher typically earns about 20–30% of the common equity in tranches, some of it tied to time and performance. In a loss, that equity is likely worth little.

None of this makes search a bad path. It makes it a concentrated bet. The 2024 study's median purchase multiple was 7.0x EBITDA, which leaves little room for a weak year. That price, paid by a first-time CEO, is where much of the risk sits.

Does this data apply to self-funded searchers?

No. The Stanford studies cover traditional search funds only. Self-funded searchers typically buy smaller businesses, worth $1 million–$10 million, with 75–90% SBA debt and a personal guarantee. There is no comparable study of their acquisition rates or returns.

The structure changes the risk. A self-funded searcher keeps roughly 60–80% of the equity, so a good outcome pays the searcher more. A bad one can reach personal assets through the guarantee. Treat the Stanford figures as a reference for traditional funds, not as odds for an SBA-financed search.

Worked example: 100 searches, start to finish

This combines the 2026 acquisition rate with the 2024 outcome distribution. The two studies cover slightly different periods, so treat the result as an approximation.

1. Start with 100 traditional search funds.
2. At a 58% acquisition rate, 58 buy a company and 42 do not.
3. Of the 58 acquired companies, about 6 are a total loss (10.5%) and about 12 a partial loss (20.5%): about 18 lose money.
4. About 11 return 1–2x (18.5%).
5. About 15 return 2–5x (25%).
6. About 10 return 5–10x (17.5%), and about 5 return more than 10x (8%).
7. Result: about 29 of 100 searches produce a return of 2x or more for investors, and about 15 produce 5x or more.

For a searcher, the honest summary is this. About 4 in 10 never buy. Of those who do, about 1 in 3 lose investors money. About 1 in 4 who buy produce the kind of result that makes the asset class look strong.

Where these numbers come from: Acquisition rates, aggregate IRR and return, search length, deal size and industries come from the 2026 Stanford Search Fund Study. The outcome distribution, median purchase multiple and investors per deal come from the 2024 Stanford study as summarized by Smash and Searchfunder. Searcher equity comes from Long Angle, and self-funded deal terms from Smash.

Related questions

What happens to searchers who never buy a company?

The fund closes and the search capital is spent. Investors lose what they put into the search budget. The searcher moves on with the network and deal skills the search built. Deciding in advance when to stop limits how much time a failed search costs.

Are search fund returns better than private equity?

The 33.9% aggregate pre-tax IRR is high by any standard. But it is an aggregate across many funds, with a wide spread underneath it. An investor in one or two deals faces the distribution, not the average.

Does buying a smaller company improve the odds?

The Stanford data does not answer that. Smaller companies sell at lower multiples, which leaves more room for error. They also tend to depend more on one owner, which adds risk of its own.

How long should a search take before I worry?

Acquisitions in the 2026 study typically took about 20 months. A search well past that point needs an honest review of the buy box, the pipeline and the remaining budget.

What comes next

If your own search is running long, the next question is How do you know when to give up on your search?

Related articles

• How do you know when to give up on your search?
• Traditional search fund or self-funded search: which is right for me?
• What's the difference between a self-funded searcher and an independent sponsor?
• ETA, search fund, independent sponsor or holding company: what's the difference?
• How do you build a holding company for acquisitions?

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.