Search Funds: An MBA Shortcut to the C-Suite

Chris Lueck had entrepreneurial ambitions coming into business school, but like many MBA students, he ended up interning at an investment bank after his first year at the University of Southern California’s Marshall School of Business. Lueck quickly changed course in his second year when his classmate Tom Tzakis suggested the two start a search fund, an alternative investment vehicle that would allow them to raise capital from investors to buy, run, and grow a privately held company.

By the time they graduated in May 2011 the two had set up their own investment firm, Pylon Capital, and by December had raised $525,000 in first-round funding from 20 investors, many of whom specialize in investing in search funds. “I liked that we’d be in charge of what we are doing as well as eventually finding a company we would be running,” says Lueck, who with Tzakis has been conducting a nationwide search to purchase a company with revenue of $5 million to $20 million a year. “Being able to do that pretty close to graduating from business school was very exciting to me,” he says.