Catalyst Fund I: Empowering the Next Generation of Entrepreneurs and Unlocking Hidden Yield in SMEs

The business landscape is at a transformative juncture. As baby boomer business owners prepare to pass the torch, a seismic shift is underway—one that opens up significant opportunities for new leadership and innovation in small and medium-sized enterprises (SMEs). At Clearly Acquired, we are proud to launch Catalyst Fund I, a $10 million search fund designed to capture this generational transition while unlocking hidden yield in sectors that power our economy. In this comprehensive post, we explore our investment strategy, the power of search fund investing, and how key multimedia insights support our vision for a thriving future.

A New Era in Business Ownership

SMEs have long been the backbone of the economy, accounting for 70% of economic activity and generating 46% of all jobs. Traditionally managed by experienced baby boomer owners, these businesses are now facing a critical transition as their founders look to retire. This generational handover isn’t just a challenge—it’s a powerful opportunity.

Many of these established companies have been undervalued, largely because they have been too small for institutional private equity. Yet, hidden beneath the surface is an untapped yield—operational efficiencies, strategic market positions, and the potential for rapid growth when steered by new, dynamic leadership. Search fund investing is uniquely positioned to seize this opportunity, bridging the gap between retiring owners and the next generation of visionary entrepreneurs.

The Surprising Truth About Baby Boomer Business Owners Nobody… explains how many boomer business owners struggle to retire because a significant portion of their net worth is locked up in their companies. This video underscores the urgent need for fresh leadership to unlock dormant value.

The Power of Search Fund Investing

A Unique Investment Model

Search fund investing is a distinct approach to private equity that focuses on acquiring and scaling quality SMEs—businesses that are often overlooked by larger funds. This model offers several key advantages:

• Alignment of Interests:
  With our fund manager investing $1 million of personal capital, every decision is driven by a shared commitment to long-term success and value creation.
• Operational Excellence:
  The search fund model pairs first-time CEOs and experienced operators with proven track records. These leaders drive efficiency improvements, modernize operations, and unlock significant hidden value.
• Targeted Acquisition Strategy:
  By focusing on medium-sized companies—especially in the sectors of trades, services, and manufacturing—we can acquire businesses at attractive valuations and position them for scalable growth.
• Generational Renewal:
  As boomer owners exit, our approach facilitates a seamless transition to new leadership. This isn’t just about financial returns; it’s about ensuring the legacy and community impact of these businesses continue under capable hands.

‍SEARCH FUNDS: How Founders Are Cashing in on The NEW … offers insights into how search funds operate as nimble investment vehicles. The video illustrates how first-time CEOs are successfully acquiring and revitalizing businesses, a core tenet of our strategy.

Why This Model Excels

The strength of search funds lies in their ability to:

• Identify Undervalued Assets: Focus on businesses too small for mega funds, capturing opportunities with significant upside.
• Drive Operational Improvements: Implement hands-on management strategies to improve performance and profitability.
• Plan for Strategic Exits: Develop clear exit pathways—through strategic sales, recapitalizations, or transitions into continuation funds—typically within 5–7 years.

For those new to the concept, The Beginner's Guide to Starting a Search Fund from Scratch is an excellent resource that breaks down the search fund process—from sourcing deals to pitching investors—making a compelling case for the model’s power.

Catalyst Fund I: Our Inaugural $10M Search Fund

Catalyst Fund I is engineered to harness the transformational potential of search fund investing. Here are the key features of the fund:

• Fund Size: $10,000,000
• Minimum Investment: $100,000
• Preferred Return: 8%
• Target Industries: Trades, Services, Manufacturing
• Business Size: Companies with EBITDA ranging from $500,000 to $5,000,000
• Geographic Focus: Primarily North American-based businesses

This fund isn’t just about capturing returns—it’s about empowering the next generation to take the helm of businesses that are the economic lifeblood of our communities.

Search Funds: A Deeper Dive provides a comprehensive look at the nuances of search fund investing. The video explains how operational improvements and strategic scaling contribute to significant value creation, reinforcing our investment thesis.

Strategic Focus: Targeting the Top 11 States

To fully capture the potential of the SME market, our strategy includes a concentrated focus on 11 key states. These states are prime targets for acquiring listings, recruiting brokers, and executing targeted marketing initiatives through awareness remarketing and custom audience strategies.

The Top 11 Target States

1. Florida: A dynamic market with a robust economy driven by tourism, services, and an ever-growing population.
2. Texas: Known for its business-friendly climate, Texas is a powerhouse of manufacturing, services, and entrepreneurial spirit.
3. North Carolina: Offers a strong mix of manufacturing and tech innovation, supported by a highly educated workforce.
4. South Carolina: Emerging as a hub for industrial growth with attractive cost structures and favorable tax policies.
5. Tennessee: Strategically positioned with robust logistics, manufacturing, and service sectors.
6. Arizona: A rapidly growing economy with a flourishing tech scene and a supportive regulatory environment.
7. Georgia: A major transportation and logistics hub that also boasts strong manufacturing and service industries.
8. Idaho: Known for its stable economic growth and supportive climate for both traditional industries and startups.
9. Nevada: Beyond entertainment, Nevada’s business-friendly policies and low taxes make it attractive for SME acquisitions.
10. Utah: A rising star with a vibrant tech ecosystem and strong industrial base, driving significant growth potential.
11. Colorado: With its diverse economy and high quality of life, Colorado continues to attract top talent and innovation.

Strategic Benefits

• Market Saturation & Growth:
  Concentrating on these states allows us to tap into regions with high market saturation and robust economic fundamentals.
• Localized Expertise:
  Building strong regional networks of brokers, operators, and experts enhances our ability to identify quality listings and ensure operational success.
• Tailored Marketing:
  Customized awareness remarketing and targeted campaigns in these states drive engagement and attract the best opportunities.

The Backbone of Our Economy: Trades, Services, and Manufacturing

Trades, services, and manufacturing form the core of the SME market. These sectors not only support local economies but also offer substantial growth opportunities when modernized and operated with strategic precision.

Trades

Skilled trades—including plumbing, electrical, HVAC, and construction—are in perpetual demand. These businesses typically enjoy strong customer loyalty and consistent cash flow. As boomer tradespeople retire, the need for new operators to modernize these industries is more pressing than ever.

Services

The service sector spans a broad array of industries from professional services to hospitality and healthcare. With recurring revenue models and high client dependency, these businesses are ripe for operational improvements and digital transformation.

Manufacturing

Manufacturing remains a cornerstone of economic strength, driving innovation, exports, and job creation. Despite competitive pressures, niche manufacturers with high-quality products are well-positioned to capture market share with the right operational strategy.

Baby Boomers are Retiring and Selling Their Small Businesses (though not detailed here) reinforces the idea that as boomer owners retire, their businesses are ripe for acquisition by dynamic new leaders.

Unlocking Hidden Yield

The hidden yield in these sectors lies in untapped operational improvements, market expansion, and technological integration. Our approach is to:

• Identify & Acquire:
  Target companies where operational enhancements can unlock significant value.
• Implement Strategic Enhancements:
  Partner with new operators to modernize processes, optimize performance, and drive revenue growth.
• Facilitate a Seamless Transition:
  Manage the generational handoff carefully to ensure business continuity while injecting innovative strategies.

A Nationwide Vision: Open to All Opportunities

While our initial focus is on the top 11 states, Catalyst Fund I adopts a nationwide perspective. We are committed to identifying quality opportunities regardless of geography. For the right operator and the right business, our search is always open.

• Capturing Quality Deals Anywhere:
  Our flexible approach ensures that high-potential opportunities are never overlooked, whether in our target states or beyond.
• Leveraging a Diverse Network:
  A nationwide network of brokers and industry experts enables us to scout and secure the best deals.
• Adapting to Market Dynamics:
  Our strategy remains agile, allowing us to shift focus and capitalize on emerging markets as conditions evolve.

Multimedia Insights: Learning Through Video

To further illustrate the transformative trends shaping our investment landscape, we recommend exploring these video resources:

• The Surprising Truth About Baby Boomer Business Owners Nobody…
  This video highlights the challenge boomer owners face with retirement, showing why there’s a massive opportunity for generational transition.
  Watch on YouTube

• Opportunity for Investors with Tsunami of Baby Boomers Retiring
  This resource details the “silver tsunami” and the wealth of opportunities arising as baby boomers exit the market.
  Watch on YouTube

• SEARCH FUNDS: How Founders Are Cashing in on The NEW …
  Gain insights into how search funds are revolutionizing the private equity space by enabling first-time CEOs to acquire and transform SMEs.
  Watch on YouTube

• The Beginner's Guide to Starting a Search Fund from Scratch
  Ideal for newcomers, this video breaks down the essentials of launching a search fund, from deal sourcing to investor pitching.
  Watch on YouTube

• Search Funds: A Deeper Dive
  For an in-depth exploration of the search fund model, this video details the strategies that underpin successful acquisitions and operational growth.
  Watch on YouTube

These videos provide a multifaceted view of both the generational shift in business ownership and the transformative power of search fund investing.

The Broader Impact: Revitalizing Economies & Empowering Communities

Revitalizing Local Economies

By focusing on trades, services, and manufacturing, Catalyst Fund I is not only poised to generate attractive returns but also to revitalize local economies:

• Job Creation:
  Each acquisition has the potential to create or preserve jobs, reinforcing community stability.
• Economic Resilience:
  Diversifying ownership and infusing new capital enhances the resilience of local markets.
• Innovation & Growth:
  Transitioning to new leadership brings fresh ideas that drive product innovation and improved customer service.

Empowering the Next Generation

At its core, Catalyst Fund I is about empowering visionary entrepreneurs:

• Supporting First-Time CEOs:
  Our model provides emerging leaders with the capital, mentorship, and operational support needed to succeed.
• Ensuring Continuity:
  We carefully manage generational handoffs to preserve business legacies while introducing innovative strategies.
• Building a Sustainable Ecosystem:
  By creating a ripple effect through job creation and community revitalization, we contribute to a robust, sustainable economic ecosystem.

Join the Movement: Invest in the Future

Catalyst Fund I is more than an investment opportunity—it’s a call to action for visionary investors committed to empowering the next generation of business leaders. By investing in this fund, you are:

• Fueling a Generational Transition:
  Helping to ensure that legacy businesses thrive under new, dynamic leadership.
• Unlocking Hidden Yield:
  Capitalizing on the untapped potential in under-the-radar SMEs in trades, services, and manufacturing.
• Driving Economic Growth:
  Contributing to job creation, innovation, and community revitalization across key markets.

How to Get Involved

• Create Your Profile:
  Start by creating your profile and getting verified to gain access to exclusive webinars, detailed prospectuses, and a network of forward-thinking investors.
• Schedule a Consultation:
  Connect with our investment team to explore tailored opportunities and discover how our search fund model can help you achieve your financial and strategic goals. Schedule a call with our experts.
• Stay Informed:
  Follow our blog and subscribe to updates for the latest insights, market trends, and success stories that highlight the impact of search fund investing on local communities.

Conclusion

Catalyst Fund I is a transformative initiative that marries the power of search fund investing with the immense potential of generational transition. By focusing on high-impact sectors—trades, services, and manufacturing—and targeting key states like Florida, Texas, North Carolina, South Carolina, Tennessee, Arizona, Georgia, Idaho, Nevada, Utah, and Colorado, we are poised to unlock hidden yield and drive economic growth. Moreover, our nationwide vision ensures that no quality opportunity is overlooked.

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With the support of industry-leading insights and multimedia resources that illustrate both the challenges of baby boomer retirements and the dynamic potential of search funds, Catalyst Fund I offers a compelling pathway for investors to generate returns while empowering the next generation of entrepreneurs.

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Invest in the future. Empower new leaders. Be the catalyst for a thriving, transformed economy.

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