Antonio Molinari "Search Funds - A new tool to support small businesses and entrepreneurial renewal" Guerini Next Milano 2019 pagg.183 E.28,00
In Italy there are certainly few who know it and even fewer who use it. We are talking about here search funds, a tool that in the current phase of rethinking the business model (a debate to which our country is no stranger) centered on the renewal of the business structure and on the creation of new businesses and new entrepreneurs, may prove to be an interesting solution to the recurring problem of effectively combining entrepreneurial skills and competences with the availability of capital. A solution, which has seen its own first field trials in the United States already in the last century just before the mid-80s, with more than satisfactory results.
In that context, search funds have proposed themselves as one of the possible tools to support and enhance small businesses, standing out both for their originality (the idea is developed in particularly qualified academic circles); both for competitive effectiveness, as a real possibility offered to young entrepreneurs to make their dreams come true. A dream, the realization of which passes through the identification of suitable investment opportunities to be acquired with the help of a group of financial partners; also restoring vitality to pre-existing companies reported to be in progressive decline.
From this, albeit brief, description of search funds, however, it is possible to understand the difference of this instrument compared to other better known solutions, such as the SPAC (Special Purpose Acquisition Company) because in the former the person who searches for capital is the same who then undertakes to manage and develop the acquired company. A characteristic differential trait is also found with start-ups, since for search funds the investment of skills and capital takes place, as mentioned, in companies that are already functioning and which are outside the objectives of common funds or other equivalent structures capital acquisition and investment.
Anyone wishing to learn more about search funds can now tap into a interesting book by Antonio Molinari, a manager who covers corporate and investment banking at Citi Bank. The reader is offered pages that clearly and effectively illustrate the various phases through which their operations are articulated: from the raising of the initial capital, to the identification of the target companies, to the conclusion of the negotiation for the purchase of the company, to the subsequent moments of management and development of the value of the acquired company. To then reach the last phase, that of the sale of the company thus developed.
The author, among the first in Italy to adequately investigate this theme, as well as a synthetic evaluation of the experiences across the Atlantic, dwells on the cases of search funds present in Italy (8 at the beginning of last year) by identifying the potential levers to be activated for their greater development in our country. A certainly fascinating approach, considering, on the one hand, the typology of the Italian entrepreneurial fabric made up to a very large extent of micro and small enterprises; on the other, both the now unavoidable need in our country for a decisive renewal of the entrepreneurial class, and, lastly, the growing impact of technological innovation.
The volume is completed by a stimulant introduction by Fabio Sattin, executive chairman of Private Equity Partners, and a concluding chapter by Marco Franzini, senior executive partner of Studio Eversheds Sutherland, who, with his considerations of a legal nature, clarifies the private nature of this instrument, its possibilities of adaptation to the legal system Italian and, finally, their central problem: the continuous need for the promoter/entrepreneur to resolve the growing misalignment between his own interests and those of the co-investors, normally and understandably focused on the sale of the company and on the extent of the profitability of the investment made.
