High performing alternative asset class based on a proven model and boomer succession

Baby boomer generation is retiring in droves. Boomer entrepreneurs own approximately 41% of all SMEs with 78% of these businesses being profitable (Guidant 2020; PwC 2019). Significant number of baby boomer SME owners don’t have any formal succession plans in place (Guidant 2020; PwC 2019).

SMEs are the backbone of our economies, as well as the key to economic growth, employment, entrepreneurship, and innovation. Over 1,500,000 SMEs with 10 to 250 employees (Eurostat 2021) reside in the EU, while SMEs represent over 90% of all businesses and over 50% of employment globally (World Bank 2022).

Leveraging the ETA model, True North Search invests in high performing entrepreneur operators in residence and growth of enduringly profitable SMEs. Our strategy transforms established SMEs into efficient engines for growth by introducing ambitious and competent management.

Historical Returns of the ETA Model

The Entrepreneurship Through Acquisition search fund model has historically outperformed venture capital, buyout and growth equity in the alternative asset class. ETA search funds have provided an aggregate of 5.2x return on investment and 35% internal rate of return for equity investors.

In addition to high returns, ETA deals provide a margin for safety for investors. Over 75% of North American ETA deals have resulted in an increase of equity value, while only 8% have resulted in complete loss of equity. In comparison, approx. 70% of tech startup angel investments result in a loss of equity value.

Investing in ETA

True North Search provides investors with access to high quality ETA deal flow of unlisted businesses led by highly talented and ambitious new professional management, enabling relatively high returns and a margin for safety. True North Search is:

  • Recruiting and vetting 4 to 6 future EOIRs a year and training them to succeed in the ETA journey

  • Providing tools and resources for search process and critical evaluation of acquisition opportunities

  • Providing attractive opportunities to invest in established small medium sized enterprises

  • Contributing to strategic direction and protecting investor interest through a board member position

  • Providing post-acquisition value creation support and sell-side advisory to maximize value upon exit

Get in Touch

To learn more about Entrepreneurship Through Acquisition as an asset class, and to get to know our current Entrepreneur Operators in Residence, please reach out to the True North Search partners. We are happy to provide you with additional information on the model.

Gautam Basu, Managing Partner
gautam.basu@truenorthsearch.io

Mikko Järvinen, Partner
mikko.jarvinen@truenorthsearch.io