Stanford GSB: The Birthplace of Search Funds

In 1984, a Stanford GSB professor named H. Irving Grousbeck had an idea. Instead of competing for scarce venture capital or waiting years for a promotion to the C-suite, what if a newly minted MBA could raise a small fund, search full-time for a privately held company, acquire it, and run it as CEO? That idea became the search fund model, and it has since reshaped how thousands of entrepreneurs think about business ownership.

Jim Southern, one of Grousbeck's students, raised what is widely recognized as the first-ever search fund around 1983. He acquired Uniform Printing and generated a 24x return for his investors. Four decades later, the model Grousbeck and Southern pioneered at Stanford has produced 681 tracked funds across the US and Canada, an aggregate pre-tax IRR of 35.1%, and a 4.5x return on invested capital.

“An influx of capital is bound to continue and will probably accelerate. Institutional capital is either assembling or appearing.”
H. Irving Grousbeck, Off Piste Investing Interview

Stanford GSB did not merely invent search funds. It continues to define the field through its biennial research study, a deep roster of faculty who have lived the model, and a curriculum that takes students from theory to live deal execution. For anyone serious about getting started in ETA, Stanford remains the reference point against which every other program is measured.

Stanford's influence on entrepreneurship through acquisition operates through two institutional pillars: the Center for Entrepreneurial Studies (CES) and the Stanford Search Fund Study.

The CES is the organizational home of all search fund activity at Stanford. It coordinates course offerings, funds research, hosts events, and maintains the dataset that underpins the biennial study. The center's role is not ceremonial. It provides the infrastructure that allows faculty to teach from real data, students to interact with active searchers and investors, and alumni to stay connected to the evolving model.

The Stanford 2024 Search Fund Study is the most cited dataset in the ETA ecosystem. It tracks 681 first-time search funds in the US and Canada, covering everything from fundraising timelines and acquisition multiples to CEO compensation and investor returns. No other institution has produced anything comparable in scope or longevity. When investors, searchers, or journalists cite aggregate search fund returns, the numbers almost always trace back to Stanford.

This combination of a dedicated center and a longitudinal research program gives Stanford a structural advantage. Faculty teach from proprietary data. Students learn from instructors who have personally completed search fund acquisitions. And the broader ETA community relies on Stanford's output to benchmark performance, calibrate expectations, and attract institutional capital.

Stanford's ETA faculty roster is unique in that every member has direct operating or investing experience in search funds. This is not a program taught by academics studying the model from the outside. It is taught by the people who built it.

H. Irving Grousbeck

Grousbeck co-created the search fund model in 1984 and has been teaching at Stanford GSB for over four decades. As the MBA Class of 1980 Adjunct Professor, he brings a perspective that spans the entire history of ETA, from the first fund through the institutionalization of the asset class. His involvement continues to lend credibility to the model and attract both students and investors to the Stanford ecosystem.

Peter B. Kelly

Kelly is a Lecturer in Management and co-author of the Stanford 2024 Search Fund Study. He teaches two of the three dedicated ETA courses and serves as a bridge between the research side of the program and its practical application. His work on the study gives students direct access to the most current data on search fund performance.

Jim Ellis

Ellis (MBA '93) co-acquired Road Rescue alongside Kevin Taweel. That company eventually became Asurion, generating a 5,275x multiple on invested capital, the highest return in search fund history. Ellis now teaches as a Lecturer in Management, bringing first-hand acquisition and operating experience to the classroom.

Gerald Risk

Risk has made over 100 search fund investments, giving him one of the deepest portfolios of any individual investor in the asset class. As a Lecturer, he teaches alongside Ellis in the Entrepreneurial Acquisition course, offering the investor perspective that complements the operator viewpoint. Students who want to understand how finding investors works in practice benefit directly from his experience.

Graham Weaver

Weaver is the founder and CEO of Alpine Investors, a private equity firm with approximately $17 billion in assets under management. Alpine's model, which centers on acquiring and growing companies through talent-driven strategies, evolved from the search fund tradition. Weaver teaches as a Lecturer and co-leads the Managing Growing Enterprises course, focused on what happens after acquisition.

Sara Heston

Heston serves as Associate Director of the CES and is co-author of the Stanford 2024 Search Fund Study alongside Peter Kelly. She manages much of the research infrastructure behind the study and provides continuity across study cycles. Her role ensures that the data underlying Stanford's ETA program remains rigorous and up-to-date.

Stanford offers three dedicated courses that cover the full lifecycle of a search fund, from initial concept through post-acquisition management. Each course is taught by faculty with direct ETA experience.

STRAMGT 543 covers the fundamentals of search fund economics, fundraising, deal sourcing, valuation, and due diligence. It is the entry point for most students exploring ETA.

STRAMGT 549, the Search Fund Garage, is a hands-on course where students work through the early stages of building an actual search fund. This is not a simulation. Students develop real investor materials, refine their search theses, and prepare for launch.

STRAMGT 355 addresses the operational challenges that emerge after closing an acquisition. Topics include building management teams, driving growth, and navigating the transition from searcher to CEO. For a broader look at how MBA programs prepare students for ETA, this course illustrates Stanford's commitment to covering the full lifecycle.

Published biennially by the CES, the Stanford Search Fund Study is the definitive dataset on traditional search fund performance in the US and Canada. The 2024 edition, co-authored by Peter Kelly and Sara Heston, tracks 681 first-time funds across four decades. For a detailed analysis of the findings, see our breakdown of the Stanford 2024 Search Fund Study.

Key metrics from the 2024 study include:

• 681 first-time search funds tracked since 1984
• 35.1% aggregate pre-tax IRR
• 4.5x aggregate return on invested capital (ROIC)
• 94 core search funds raised in 2023, a record year
• 85% of searchers hold an MBA
• $14.4 million median purchase price for acquisitions

These numbers matter because they establish the performance baseline for the entire asset class. When investors evaluate a prospective searcher or when an MBA student weighs the financial case for ETA, the Stanford data is where the conversation begins. For more on what these numbers mean in practice, see our analysis of search fund returns.

The study also reveals trends. The record 94 core search funds raised in 2023 confirms the accelerating growth Grousbeck has described. As institutional capital enters the space and more MBA programs adopt ETA curricula, the funnel of new searchers continues to expand.

Jim Southern: the first search fund (~1983)

Southern worked with Grousbeck to develop and test the search fund concept while a student at Stanford GSB. He raised what is recognized as the first-ever search fund, acquired Uniform Printing, and delivered a 24x return to investors. That result validated the model and opened the path for every searcher who followed.

Kevin Taweel and Jim Ellis: Road Rescue to Asurion (5,275x MOIC)

Kevin Taweel (MBA '92) and Jim Ellis (MBA '93) co-acquired Road Rescue, a roadside assistance company. Through a series of strategic pivots and acquisitions, the company transformed into Asurion, which became one of the largest device protection providers in the world. The investment generated a 5,275x multiple on invested capital, the highest return in search fund history. While this outcome is exceptional and not representative of typical search fund performance, it demonstrates the scale of value creation that the model can produce.

Diana Ding and Sydney Lehman: Zone 2 Partners

Ding and Lehman (both MBA '22) launched Zone 2 Partners, a search fund focused on women's health. Their fund represents the evolving profile of Stanford searchers and the broadening of ETA into sector-specific strategies. It also reflects the growing participation of women in an asset class that has historically been male-dominated.

Stanford's small class size (approximately 420 students per cohort) creates a tight-knit environment where ETA-interested students can find each other quickly. The CES serves as the institutional hub, organizing events that bring active searchers, investors, and alumni operators to campus throughout the year.

Beyond formal coursework, students engage through study groups, investor dinners, and informal mentoring relationships with alumni who have completed the search fund journey. The proximity to Silicon Valley also means access to a broader entrepreneurial ecosystem, including venture capital, private equity, and technology operators who understand the mindset of building a company through acquisition.

The Stanford ETA community is not confined to campus. Alumni maintain active networks that help new searchers with introductions to investors, diligence on prospective acquisitions, and operational advice during the critical first years as CEO. This network effect compounds over time, as each successful searcher adds credibility and connections to the pool.

Stanford GSB tuition is $85,755 per year for the 2025-2026 academic year. Including living expenses, health insurance, books, and personal costs, the total two-year investment typically exceeds $200,000.

The financial calculus for a prospective searcher is different from that of a student heading into consulting or investment banking. Search fund economics involve a period of unpaid or modestly compensated search (typically 18 to 24 months after graduation), followed by the acquisition and the beginning of CEO compensation. The payoff comes through equity upside, which the Stanford data shows can be substantial, but is not guaranteed.

Stanford GSB offers need-based fellowships that can significantly reduce the net cost. For a detailed framework on evaluating whether an MBA makes financial sense in the context of a search fund career, see our analysis of MBA ROI for search fund entrepreneurs.

Stanford GSB is one of three Tier 1 programs for ETA, alongside Harvard Business School and IESE Business School. Each excels in different dimensions.

Stanford's distinctive strengths are the origin story (the search fund model was invented here), the biennial study (the most comprehensive dataset in ETA), and the faculty depth (six instructors with direct operating or investing experience). Harvard brings a larger case study library, a $130,000 Search Fund Fellowship, and the largest annual ETA conference. IESE leads in international ETA, tracking 320 funds outside North America through its International Search Fund Center.

The right choice depends on geography, budget, and career goals. For a full comparison across all programs, see our ranking of the best MBA programs for search funds.

Stanford GSB is the strongest fit for candidates who want to immerse themselves in the intellectual and practical foundations of ETA. The ideal applicant is someone with three to seven years of professional experience, a genuine interest in small and medium enterprise management, and the conviction to pursue an acquisition-driven career path after graduation.

Candidates should be comfortable with ambiguity. The search fund path involves a prolonged period of searching without a guaranteed outcome, followed by the challenge of leading a company where the new CEO must earn trust quickly. Stanford's program prepares students for this reality, but it does not eliminate the inherent uncertainty.

Stanford is particularly well-suited for candidates who value data and research. Access to the CES dataset, the study authors, and the broader research community is a resource that no other program can replicate. If understanding the statistical reality of search fund performance matters to your decision-making process, this is the place to be.

• Getting started with search funds
• Stanford 2024 Search Fund Study: key takeaways
• Search fund returns: what the data shows
• MBA and ETA: how business school prepares you
• Best MBA programs for search fund careers
• MBA ROI for search fund entrepreneurs
• Finding investors for your search fund
• IESE Business School profile
• Harvard Business School profile