A Guide to writing your Search Fund PPM

Fundamentals of a Search Fund

Why the Private Placement Memorandum is the cornerstone of your search fund journey

For aspiring search fund entrepreneurs, the Private Placement Memorandum (PPM) is one of the first formal outputs of the search journey—and perhaps the most important in the early stages. It is often the very first introduction an investor will have to the searcher. The PPM is crafted with care, reviewed at leisure, and weighed for its content, coherence, and polish. It is your calling card and your strategic roadmap in one document.

A well-prepared PPM communicates professionalism, clarity of thought, and operational readiness. More importantly, it allows the searcher to confront critical questions: Why am I doing this? What is my search thesis? How will I run a disciplined acquisition process? Where am I willing to compromise, and where do I draw a line? In that sense, preparing a PPM is as much about internal alignment as it is about external persuasion.

This mini-series is designed to help prospective searchers draft their PPMs with confidence. Each episode focuses on a key section or theme within the document, offering a structured breakdown, actionable guidance, and contextual commentary. You'll learn what investors expect, what common pitfalls to avoid, and how to position yourself in a compelling and authentic way.

While there are standard formats and expectations for a PPM, there is no single way to write one. The goal of this series is to equip you with the tools to make informed choices and tailor the document to your personality and vision—while maintaining the professionalism and clarity investors require. A good starting point is the Stanford Primer template PPM. This mini series is designed to complement the template with some best practices.

Let’s begin our journey with the outermost layer: the first three sections that frame your pitch.

Design, disclaimers, and executive summaries—laying the foundation for investor trust.

Before an investor reads your search strategy or your bio, they will see the cover page. It might seem minor, but this initial presentation sets expectations. A clean and professional front page, with the name of your search fund, your own name, email address, and phone number, date, and the clear label "Private Placement Memorandum," sends a quiet message: "I have my act together."

Subtle aesthetic touches like a tasteful logo or a muted color palette can enhance visual appeal, but don’t overdo it. It is a formal investment document. Form should follow function.

Immediately following should be a table of contents. Many PPMs are around 30 pages long. Investors may want to jump to relevant sections—especially the executive summary, budget, and legal terms. A clear, well-organized table of contents demonstrates structure and consideration for the reader.

The legal disclaimer is more than just boilerplate. It's a required legal shield that defines the nature of the document and its limitations. It should state that this is a confidential document shared for informational purposes only and does not constitute a public offering. It should make clear that any forward-looking statements carry risks and that the recipient agrees to keep the document private. Consider working with counsel to ensure this section is tailored to your jurisdiction’s requirements or at least aim to have a strong grasp of legal requirements.

Arguably the most-read section of the entire PPM is the executive summary. If investors only glance at one page, it will be this. Typically formatted as a one-page table, this section should summarize:

Total search capital being raised and the unit size
Timeline of the search phase (usually 24 months)
Geographic focus and whether the search is industry-focused or agnostic, consider mentioning which industries were selected as a sample if any
Sourcing strategy: proprietary outreach, brokered deals, or a mix
Key investor terms: step-up rights, preferred return, return waterfall, and principal equity vesting

This page is your elevator pitch. It must be tight, fact-driven, and well-laid-out. Clarity here makes everything that follows more compelling.

Search Starts with You: How to Tell Your Story

Investors invest in people. Paired with the search strategy—the person (or people) behind the search fund carries the weight of the entire proposition. The background section is where the searcher has a chance to communicate not just qualifications, but personality, leadership potential, and purpose.

For solo searchers, this section should be approximately one page. It should follow a clear chronological arc, walking the reader through your academic and professional journey. Rather than listing bullet points or duplicating a resume, use narrative prose to tell a coherent story. Highlight pivotal experiences—especially those that demonstrate initiative, resilience, or entrepreneurial leanings. Briefly touch on how you discovered the search fund model and why you are pursuing it now.

This is also the place to include a more personal note. Investors appreciate searchers who are humble, self-aware, and authentic. Mention hobbies, family background, or the story behind your search fund’s name, whatever you feel is appropriate. A touch of humanity can go a long way in building rapport.

For duo searchers, spend time explaining how the partnership was formed and what makes it compelling. Detail how your skills and experiences complement each other, how responsibilities will be shared, and how you plan to make joint decisions. Team dynamics can be a red flag or a selling point—be proactive in making the case.

Including a photo is optional, but if you choose to include one or more, ensure it matches the tone of the document.

Your Roadmap to Acquisition: Outlining the Search Journey

Your search strategy section is where investors begin to see how theory meets execution. It tells them how you plan to spend their capital, what your timeline looks like, and how you intend to find, evaluate, and acquire a company. Remember that the more you front load now, the smoother your search will be.

Consider starting with a visual representation of the five core stages of the search process:

Then dive into each phase. In Stage 1, describe your fundraising timeline and investor mechanics: Right of First Refusal, 50% step-up rights, vesting tranches. Touch on your budget (which we will explore below). Be realistic with timing but show that you are organized and already building momentum. If your fundraising process runs longer than expected, make sure you update the timeline accordingly.

In Stage 2, go deep into how you will source deals. If you have a geographic focus, explain why. If, for instance, you have an industry thesis, outline how many industry "sprints" you will pursue and how long each will last. Clarify what industries or regions are off-limits, and why.

Demonstrate awareness of tools and tactics. Name the databases you plan to use (e.g., Grata, PitchBook, Crunchbase or your local business database etc.), your CRM system, your network and intermediaries, your outreach strategy (emails, calls, LinkedIn outreach), and segmentation logic. If you plan on working with interns, explain how they will concretely help you and how you plan on training and managing them. Explain how you plan to manage volume and prioritize leads. Consider adding a funnel graphic to show how many companies you expect to screen, contact, meet, and issue LOIs to before closing.

Highlight your investment criteria: revenue size, EBITDA, ownership type, customer concentration, margins, etc. Show thoughtfulness in screening, perhaps referencing a scorecard that ranks criteria from essential to nice-to-have.

The more you show you’ve done the work in advance, the more investors will believe you can execute under pressure.

Sealing the deal: from searcher to CEO

While the first few phases are centered around an entrepreneur’s ability to source and close a deal, the real test is in what happens afterward. This section should walk through the key elements of closing the transaction and the transition into leadership.

In Stage 3, describe the various options of capital stack you could use to finance the acquisition. Standard structures typically involve a mix of senior bank debt, seller notes, and equity from your investor pool. Be clear about your assumptions and prepared to adapt as each deal may demand a different structure.

Outline your approach to due diligence. Which service providers do you plan to use for financial, legal, technical diligence? Mention firms by name if you’ve already had preliminary conversations. Briefly explain how you hope to structure the LOI and exclusivity period to allow time for diligence and financing.

Stage 4 involves becoming CEO. This is not just a title change—it's a transformation. Acknowledge that your first few months will be about listening and learning. You’re not expected to overhaul the business on day one. Show humility and a plan for how you will win trust with the management team and employees.

Discuss your plans to build a board of directors. Emphasize that you see the board not just as a legal obligation, but as a strategic resource—a source of mentorship, accountability, and long-term support.

In Stage 5, describe your long-term value creation plan and eventual exit strategy. Investors know exits are years away, but they want to see that you have an understanding of value realization, whether through strategic sale, private equity, or internal succession.

Budgeting and Risk Management

This section blends operational planning with financial discipline. Your budget is a direct reflection of your strategy and your mindset as a searcher.

Present a clear table breaking down your budget categories. We have highlighted best practices to help you design your budget for each category:

Salary: specify if the amount includes any social contributions. Understand your personal financial needs so you need not worry about your finances during your search but showing that your suggested salary represents a salary cut from your previous job can indicate the opportunity cost of running a search. Additionally, search capital is expensive for searchers so make sure you strike a balance between keeping costs low but feeling comfortable during your search.
Office expenses: can you work from home or should you rent an office space? This ties into your team structure selection (i.e. partnered vs solo, intern strategy etc.). If you require an office space, get quotes from different spaces that meet your requirements.
Travel: map out how often you expect to travel a month to meet with sellers, attend trade conventions etc. Then try calculate a ball park figure covering transport, accommodation and food to create a travel budget.
CRM and sourcing tools: obtain quotes from various data bases and software providers and assess which tool or resource is most helpful for you and meets the criteria for your search.
Legal and accounting support: contact service providers earlier to build the relationship and obtain quotes to understand what the legal setup will require and obtain a quote for your diligence costs. Include around two “failed” deals where you will need to incur diligence costs as the diligence for the final acquisition will be covered by transaction costs.
Marketing materials and printing: what do you need to create a good relationship with sellers? Will you require business cards, a basic website or anything else to market yourself. Plan it ahead and obtain quotes.
Contingency: include some extra cash to cover the unexpected.

Show both top-down benchmarking (based on what other searchers have spent) and bottom-up planning (based on your specific needs). Investors will appreciate the combination as it shows you have done your homework and spoken with other searchers and really understand what you will need for your search based on your approach and current situation.

Then move to investment risks. Outline the primary risks which include, but are not limited to:

Failure to find an acquisition
Acquiring a poor-performing business
Weak leadership execution
Illiquidity of the investment
Macroeconomic disruption

For each risk, propose mitigants. These might include, for instance, screening rigor, search fund community support, investor networks, conservative financing, or strong governance through the board. The goal is not to eliminate concerns—it’s to show you’re aware of them and prepared to manage them.

The finishing touches

The appendices offer depth, references, and clarity without crowding the main narrative. Include the following:

Resume: One page preferred, two max, concise and professional
Industry theses: One or two well-developed theses, each with a brief market overview, scorecard, SWOT as a nice to have, and example company if possible
Illustrative deal economics: Show high-level return math under basic assumptions
Literature: Offer a page with links to resources (Stanford/IESE primers, books, podcasts, blogs etc.)

Finally, revisit your entire document with a fresh eye. Check grammar, structure, tone, and consistency. Ask a few trusted peers and a few outsiders to review it. Feedback from both camps is invaluable.

The traditional format used is Word and then a PDF conversion. Searchers increasingly use PowerPoint. Different styles appeal to different investors. For the sake of simplicity and in the interest of your time, we would recommend sticking to the Word formatting but it’s a matter of personal preference although do not expect all investors to read two different documents if you prepare both formats. Keep formatting simple, clean and concise. Authenticity matters, but professionalism earns trust.

Conclusion: The PPM as a Launchpad

Writing a Private Placement Memorandum is not a box to check—it’s a strategic exercise in defining your vision, refining your plan, and communicating your credibility. It forces you to answer tough questions before investors ask them. It helps you align your time, energy, and capital around a focused approach. And it becomes the first proof point of how you will perform under pressure.

Done well, your PPM will serve as both a fundraising asset and a self-guided blueprint for your search. It signals preparedness, inspires confidence, and opens the door to meaningful investor partnerships.

This mini-series has walked you through every core section of the document. Now it's time to put pen to paper. Take your time, iterate thoughtfully, and remember: your PPM is not just a memo—it's the start of your entrepreneurial legacy.

New to search funds? Check out the article covering the basics of what is a search fund.

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