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Is business succession by the search fund model an option for Central Europe?



Objective: Introduced in the 1980s in the USA, the search fund model as a niche financial instrument of entrepreneurship through acquisition has not yet become popular outside North America. This article responds to the question whether search fund could be an interesting model for Central European countries with an increase in business successions.

Research Design & Methods: A qualitative content analysis of interview data from eight cases from German-speaking countries allows analysing the context and experiences, as this is the region with the most cases of applications within Central Europe to date.

Findings: The results reveal the entrepreneurial intent of the searchers, the searcher’s confirmation of the theoretical advantages of the search fund model, and the low popularity of the model in the German-speaking markets due to scepticism and hindering factors like the criteria catalogue, market idiosyncrasies, competition of private market investors, and lower control of choosing and running a target company. Furthermore, these markets offer well-established financing alternatives which makes searchers choose alternative models.

Implications & Recommendations: Because the search fund model as niche model does not tap its full potential, a transfer of best practices between different regions in the world is beneficial. Moreover, platforms connecting successors, funders, and predecessors may be useful in this regard.

Contribution & Value Added: The study offers first empirical insights on adoption factors of the search fund model in German-speaking markets: in so doing, it sheds light on preferences and concerns of the parties involved, with the aim to facilitate the model’s future application all-over Central Europe.



Business succession; Search fund model; Entrepreneurship through acquisition

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Author Biography

Jörg Freiling

Full Professor at the University of Bremen, Faculty for Business Studies and Economics, LEMEX Chair in Small Business and Entrepreneurship.

He graduated in Business & Economics at Bochum University. He holds a PhD in Business & Economics and a second doctorate (habilitation) from Bochum University as well. From 2000 till 2002, Jörg Freiling was Visiting Professor in Marketing at the Free University of Bozen-Bolzano, Italy. At Innsbruck University, Austria, he was Visiting Professor in Management in 2001. In 2001, he became Full Professor at the University of Bremen. In 2013 he was Guest Lecturer at Universidad Autónoma del Estado de Hidalgo at Pachuca, Mexico. Since 2001 he holds the LEMEX Chair in Small Business and Entrepreneurship. Together with Gralf-Peter Calliess he supervises the project “Legal Certainty and Justice in International Transactions†of the Collaborative Research Center on ‘Transformations of the State’ at Bremen University. Moreover, he is member of the Center for Transnational Studies of University of Bremen and University of Oldenburg. From 2009 till 2011, Jörg Freiling was Dean of Study Affairs. Since 2011 till now he is Vice Dean of the Faculty for Business Studies and Economics.

His research interests are: international entrepreneurship, migration & diaspora entrepreneurship, new service ventures, entrepreneurial failure, competence-based management, governance of SMEs in international transactions, governance of transnational companies, family governance, business successions, and business model innovations.

Max Oestreich

Max Oestreich is MBA Graduate at Johannes Kepler University Linz, Austria – LIMAK Austrian Business School. His research interests have so far been in the fields of new venture creation, mergers & acquisitions, entrepreneurship through acquisition, and business succession.


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