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Entrepreneurial Finance, Deal Structure, Search Fund
This case involves an entrepreneur who raises a search fund to pursue the acquisition of a software firm. It is intended for the deal structure segment of an entrepreneurial finance course, as it illustrates stages of financing, returns to investors, layering of debt and equity, and valuation, as well as the search/acquisition process. The case is positioned with the entrepreneur having found an “ideal” company to acquire; however, three days prior to closing, he has uncovered some information the seller had been trying to hide. He now needs to decide whether he should continue with the deal.
Journal of Management Policy and Practice