⚡ TL;DR:

Featured this week: SBA-preapproved San Diego metal fab — $683K SDE at 2.2x →

"Search fund" is one label doing the work of three different capital structures, and the one you pick decides when you raise money, how much of the company you keep, and where the downside lands if the deal fails.

This week's deep dive separates the three structures that share the name (traditional search fund, self-funded search, independent sponsor), compares the most-cited Stanford and Yale return figures, explains why they differ, and shows how outcomes are distributed across exited searcher-CEOs. It ends with a one-page, four-question test for picking your lane.

Read the full breakdown →

The broker reports a 30+ year San Diego welding and custom-metal fabrication business with 10 employees, a C-60 contractor classification, and a $7,000 monthly lease. It is listed as SBA pre-approved with a stated $225K down payment, and the seller is retiring.

Why this deal stands out: At 2.2x SDE, it has the strongest modeled debt coverage in the issue. The broker has already run the business through SBA pre-approval and lists a $225K down payment, giving a buyer a more concrete financing starting point.

💡 EBIT Take: The C-60 license is the transition question. California contractor licenses require a qualifying individual; for a corporation that can be an RMO or RME, so confirm exactly who qualifies this license and whether that person stays after closing. The listing does not disclose customer concentration, so get the top-five customer breakdown before the LOI.

If Deal #1 is financed with the standard 90% SBA structure modeled below, the buyer would guarantee roughly $1.3M of debt. On the same modeled structure, the six deals in this issue imply personal guarantees ranging from roughly $1.3M to $2.9M. Actual exposure depends on the financing structure, collateral, recoveries, and loan terms.

Ink offers personal guarantee insurance for SBA acquisition buyers. Book a call to see what coverage and pricing could look like on a deal you are considering.

The listing shows a Collier County window-covering business at $3.2M, with a stated $320K down payment, roughly $710K of discretionary earnings, and $2.16M of revenue. The 10% stated down payment is the financing hook; verify the broker's more detailed operating claims directly before relying on them.

Why this deal stands out: The live listing shows a 10% stated down payment and a 32.8% reported earnings margin. At roughly 4.5x reported discretionary earnings, though, the buyer is paying for profitability and positioning rather than a low multiple.

💡 EBIT Take: “Lender pre-qualified” applies to the deal economics, not necessarily to you as the borrower. The next diligence question is customer acquisition and relationship ownership: what share comes from repeat or referral business, who holds the key trade relationships, and how transferable are they? If those relationships are seller-centered, negotiate a longer transition before accepting the multiple.

The broker reports an 18-year Indiana custom-apparel company selling almost entirely through its own website, with more than 10,000 first-page Google keyword rankings and roughly 70% of monthly sales from repeat customers. It reports no customer above 5% of revenue, no debt or inventory, sub-50% production utilization, and an owner who is not embedded in daily operations.

Why this deal stands out: If the listing data holds, 70% repeat revenue with no customer above 5%, minimal working-capital needs, and unused capacity is a combination worth a closer look at 3.6x reported cash flow.

💡 EBIT Take: Revenue fell from $2.74M in 2023 to $2.34M in 2024 and $2.10M in 2025. That trend matters more than the headline SEO asset: determine why revenue declined, then independently diligence the rankings, traffic quality, conversion, and repeat-customer cohorts before underwriting paid search as upside.

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Founded in 1974, this Washington custom sheet-metal fabricator serves industrial, architectural, commercial, and government customers with a 13-person union workforce. The listing includes about $1.39M of FF&E plus $50K of inventory, and the seller is retiring.

Why this deal stands out: It has the largest reported earnings in the issue at roughly 2.8x SDE, while the listed equipment value equals more than half the asking price. The customer description spans ports, mills, grain elevators, food processing, building trades, and government work, although the listing does not disclose actual concentration.

💡 EBIT Take: A union workforce makes labor diligence central. Review the collective bargaining agreement, change-of-control implications, benefit obligations, and any potential pension withdrawal liability with counsel. Then separate negotiated repeat accounts from competitively bid work to determine how much of the 50-year history actually transfers.

The broker lists a Brooklyn car wash at a reduced $1.875M ask, with $1.3M of revenue, $500K of cash flow, $550K of included FF&E, owner financing, and a property option. It also reports a 30-year lease at just $7,700 per year — a highly unusual figure that should be verified against the lease before underwriting the deal.

Why this deal stands out: The seller has reduced the price and is offering financing, while the reported $500K of cash flow screens at about 1.9x modeled debt coverage. The economics could be compelling if the lease and revenue figures hold up in diligence.

💡 EBIT Take: Start with the lease. The published $7,700 annual rent is extraordinary for the stated location, so confirm the actual rent, escalators, pass-throughs, remaining term, assignment rights, and property-option terms in writing. Then verify wash volumes and bank deposits against the $1.3M revenue claim before giving the 38.5% cash-flow margin any weight.

This Knoxville flooring company is offered either as a 100% acquisition at $2.4M or an 80% partnership buy-in at $1.8M, with the incoming partner running day-to-day operations while current leadership shifts toward growth. The listing reports 2025 revenue of $3.84M and $552K of earnings, but its structured field labels that figure SDE while the description calls it “net income”; BizQuest also flags seller financing as available.

Why this deal stands out: The structure matters more than the headline multiple: buy 100% or pay $1.8M for 80% while current leadership remains involved. The listing also reports 30+ jobs per week and a 38% “average margin,” although it does not define that margin metric.

💡 EBIT Take: Resolve the earnings definition before valuing this at 4.3x. Get the P&L and recast to determine whether $552K is truly net income, SDE, or something in between, and do not assume the stated 38% margin is gross margin. On the 80% structure, decision rights, distribution policy, seller employment, and the formula for buying the remaining 20% matter more than the headline price.

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