Why do so many North American searchers emerge from business schools, while school ranking does so little to explain differences in returns? This article brings together public data, school programmes, conferences and long-term relationships to explore the role business schools may play.
Stanford Graduate School of Business’s 2026 search fund study reports that 80% of the latest cohort of searchers held an MBA and 61% had taken a course in entrepreneurship through acquisition (ETA).
The connection between search funds and business schools in North America is deeper than the degree itself. Students, professors, investors and alumni meet repeatedly over several years. Candidates encounter and test ETA in the classroom; some become searchers and company CEOs; some later return as investors, directors, mentors or case contributors. The school becomes a place where practical experience, relationships and judgment can circulate from one cohort to the next.
ETA is a path in which an entrepreneur acquires an existing business, becomes its owner and principal operator, and builds value through long-term stewardship. A traditional search fund is one established version: one or two entrepreneurs first raise capital to search, then arrange equity and debt for an acquisition, and finally step into the acquired company as its operating leaders. The central question in this article is not whether an MBA is required. It is why business schools have become unusually durable connection points around that path—and what markets beyond North America can learn from the mechanism.
In the latest cohort, 80% held an MBA—but school ranking did not explain returns
Stanford’s 2026 study compares searchers by the year in which they launched their search. Among those who began in 2024–25, 80% held an MBA and 61% had taken an ETA course. The course figure had risen from 48% for the 2022–23 cohort and 37% for the 2020–21 cohort.
SEARCHER PROFILE
80% of the latest cohort held an MBA; 61% had taken an ETA course
- 80%
- of the latest cohort held an MBAMedian age: 32
- 61%
- of the latest cohort had taken an ETA course48% for the 2022–23 cohort; 37% for 2020–21
Most systematic ETA courses in North America sit within business schools, although independent providers such as Fetch Strategies also offer education and support. The 61% figure therefore measures broad exposure to ETA education; it is not a business-school course share.
A separate 2026 study from Yale School of Management helps place the MBA finding in context. Daniel Lazier, Jacob Thomas and A. J. Wasserstein examined 155 exited traditional search fund projects backed by six repeat investors. In 141 projects, at least one member of the search team held an MBA. In 14, no team member did.
EXITED PROJECT OUTCOMES
IRR differed sharply between the two groups of exited projects
Median IRR
Mean IRR
The difference remained statistically significant after the authors controlled for education, prior experience, geography, industry and other observable variables: having no MBA was still associated with lower IRR.
Yet the data did not show a stable return gradient as school ranking rose. Top-15 MBA projects had mean and median IRRs close to those from other MBA programmes; M7 projects also did not separate clearly from the rest. Projects associated with Harvard or Stanford had a median IRR of 22%, compared with 30% for other MBA projects, and mean IRRs of 21% and 24%, respectively. In this sample, the proposition that a more prestigious school produced a higher return did not hold.
The limits matter. The study includes only projects that completed an acquisition and later exited. The non-MBA group contains just 14 observations. It cannot establish that the MBA itself caused a better outcome, nor can it isolate the effects of prior employment, wealth, networks, individual ability or investor access.
The data nevertheless poses a useful question. If an MBA is associated with outcomes in this sample but school ranking is not, perhaps the relevant mechanism is not the brand on the diploma. It may lie in whom candidates meet, what they experience and how they become known over time.
Courses, support programmes and conferences create a long-term connection point
Business schools matter because the participants in ETA interact repeatedly and can return in new roles.
A student may first encounter ETA through a course and cases, discuss a partnered search with a classmate, and meet acquisition CEOs and investors in class or at a conference. After graduation, she may launch a search, acquire a company and become its chief executive. Several years later, she may return as an alumna, investor, director, mentor or case contributor and help the next group of candidates understand the path.
ROLE RETURN
Practitioners return in new roles, carrying experience into the next cycle
Fellowships · conferences
- 01Student or candidate
Encounters and tests ETA through courses, cases and peers
- 02Searcher
Raises search capital and evaluates an established business
- 03Company CEO
Acquires the business and assumes operating and ownership responsibility
- 04Investor, director or mentor
Returns practical experience and relationships to the school
Each round of searching and operating generates decisions, evidence and stories that can become material for the next. That return loop is what gradually gives a school its role as an ecosystem anchor.
A school does not need a complete ETA system at the outset. As more students become searchers and some of them acquire and operate businesses, a network of alumni, mentors, directors, investors and teaching cases can form around the institution. When practitioners come back into courses and conferences, later candidates gain access to lived experience and meet people who may eventually work alongside or support them.
In Search Funds & Entrepreneurial Acquisitions, Jan Simon compares the relationship between ETA and business schools with that between medicine and medical schools. Physicians perform surgery, teach and conduct research; some ETA professors similarly teach while participating in live projects as repeat investors and continuing to write cases and educational material. Simon also observes that the search fund community’s collaborative culture resembles academia more than conventional private equity, with investors frequently teaching in business schools.
The comparison reveals something that a list of courses misses: the same person can perform several roles over time. Practice does not flow in only one direction from classroom to company. It returns.
Courses turn dispersed experience into material that can be tested
ETA courses make an otherwise unfamiliar career path visible. A prospective searcher must understand more than how to find a company and finance a transaction. She needs to consider why an owner would sell, how a handover affects employees and customers, how a board works and whether she wants to operate the same business for years after closing.
Cases carry actual projects back into the classroom. Students can examine the trade-offs visible at the time of a transaction, the problems that emerged later and the eventual outcome. Professors and operators can add context that has not yet entered a textbook. The result is not simply more enthusiasm for ETA; it is a better opportunity to compare the path with founding a startup, investing, joining an established business or returning to a previous industry.
Support can continue after the course ends
Understanding ETA in class and being ready to launch a search are different stages. Schools have developed different models for bridging them: fellowships, research centres, mentoring programmes and industry gatherings.
PROGRAM COMPARISON
Several public models of business-school support for ETA
| School and programme | Primary stage | Support | Emphasis |
|---|---|---|---|
| HBSSearch Fund Fellowship | Post-graduation · full-time self-funded search | $65,000 a year for up to two years, plus continued faculty guidance | Reducing the financial barrier to a full-time post-MBA search |
| Chicago BoothETA Fellows Program | During the MBA · October to May | Focused learning, peer events, field exposure, coaching, and research and travel support | Preparing students to pursue ETA within several years of graduation |
| IESEInternational Search Fund Center | From student study to long-term industry participation | Research, courses, a four-day bootcamp and conferences for different roles | International research and connections across career stages |
| INSEADETA & Search Funds Hub | From current students to long-term alumni engagement | Courses, research, conferences and connections with investors and advisers | Connecting entrepreneurs, investors, advisers and owners through a global network |
| HKUSTETA Fellowship | Pre-search · four to six months | Structured learning, mentorship, practical exercises and investor engagement | Building fundraising readiness and execution capability for Asian candidates |
Harvard Business School extends funding and faculty support into a graduate’s full-time, self-funded search. Chicago Booth concentrates more of its structured preparation during the MBA. IESE combines research, courses and industry events across career stages. INSEAD’s Hub links students and alumni with investors, advisers and business owners through a global network. HKUST’s four-to-six-month fellowship provides pre-search preparation for candidates focused on Asia. These programmes all extend support beyond a single course, but they address different candidates at different moments.
INSEAD also has a more direct connection to outside capital. INSETA collaborates with the school’s ETA & Search Funds Hub and offers capital as well as mentoring and board resources for search funds and other ETA projects. The distinction is important: INSETA is an independent ETA investment firm, says that it is open to candidates regardless of business-school affiliation, and is not a campus fund established by INSEAD. It is more accurately understood as an outside fund working closely with the Hub.
For conferences, the important question is who preserves the agenda
After an acquisition, a searcher’s questions change. Sourcing and financing give way to people, customers, governance, technology and capital allocation.
Stanford’s Search Fund CEO Conference and IESE’s International Search Fund Conference are both biennial and alternate by year. Stanford held its fifth CEO conference in 2025, bringing together nearly 500 people—mostly search fund CEOs and the advisers and supporters who work with them. The programme addressed operations, artificial intelligence, long-term holding and boards, alongside substantial time for exchange. IESE’s conference, founded in 2015, brings together searchers, CEOs and investors from multiple countries.
Whether an event involves one school or several is not the most useful distinction. Stanford and IESE’s events are led by school institutions or research centres. Booth–Kellogg and CEIBS–IESE are cross-school collaborations, but they are still jointly anchored by school institutions. “Cross-school” describes the breadth of collaboration, not the source of the agenda.
WHO SETS THE AGENDA
The durable distinction is who sets the agenda over time
| Agenda owner | Examples | Reach | What accumulates |
|---|---|---|---|
| School-led | Stanford, IESE; Booth–Kellogg, CEIBS–IESE | Single-school or cross-school, with reach shaped by institutional networks and geography | Courses, research, conferences, alumni relationships and longitudinal reporting |
| Student-led | Booth ETA Club, ETA@Kellogg | Primarily current students, with alumni, searchers and practitioners brought in | Career exploration, talks, workshops and peer learning; continuity depends on handover |
| Independent | Regional ETA communities; SIG Partners (investment and support platform) | Candidates, operators, investors and advisers across schools and cohorts | Local practice, mentorship and capital connections, shaped by each organisation's model |
A more revealing distinction is who can maintain that agenda. A school institution can connect courses, research, reports, conferences and alumni relationships over time. A student club can remain close to the questions of the current class, but continuity depends on each leadership handover. An independent regional community can connect participants across schools and graduating classes, while a platform such as SIG Partners can combine investment with support for acquisition entrepreneurs. These organisations sit outside school institutions, and their functions and agendas differ.
This is an analytical distinction, not an industry-standard classification or a hierarchy. Each format can bring dispersed CEOs, directors, investors, professors, students and professional advisers back into one network. Public evidence does not yet show how much those connections improve candidate selection, access to capital or operating outcomes.
The MBA can combine selection, self-selection and observation
Three processes often occur together. A school selects its entering class, and an applicant chooses to invest in an MBA. Courses then help the student decide whether ETA fits. Over one or two years, professors, peers, alumni and possible investors see how the candidate behaves beyond the résumé.
CANDIDATE FORMATION
The MBA's role extends beyond the classroom
- 01Selection into the MBA
The school selects the applicant, who also commits time and tuition.
- 02Testing personal fit
Courses, cases and real work clarify what the path requires.
- 03Performance becomes visible
Repeated interaction reveals judgment, collaboration and commitment.
Selection begins before an ETA course
Before a candidate encounters search funds, admission and enrolment have already created two layers of selection. A school evaluates work history, academic preparation, recommendations and leadership experience. The applicant chooses to pay tuition, forgo income and spend one or two years reconsidering a career. Those decisions may reflect ability and ambition, but also professional networks, mobility, appetite for risk and the financial cushion required for a transition.
For many people, a search fund becomes a concrete option during that period of exploration. Searchers may disproportionately emerge from business school partly because people enter an MBA already looking for their next chapter. During the programme, courses, cases, peer discussion and operators’ experience let them compare ETA with other careers and test whether they actually want to take responsibility for an acquired company.
This is why the return difference in the Yale sample may contain a substantial selection effect. “Has an MBA” may capture education, but it may also reflect prior employers, personal ability, social and financial resources, and the chance to enter an investor’s field of view. Existing data cannot separate those influences.
Good education can help some people decide not to search
A search fund asks an entrepreneur to find a business and then personally take responsibility for operating it. That choice can determine years of professional identity, family location and financial exposure. Courses, cases, internships, independent projects and discussions with operators can help a candidate judge whether she wants to steward an established company, build trust with an owner, keep learning through unfamiliar transaction and industry questions, and assume day-to-day responsibility for customers, employees and cash flow.
Helping a candidate understand ETA is not the same as persuading more people to pursue it. Better information may allow some students to conclude earlier that the path is incompatible with their abilities, family circumstances or professional aims.
Josh Lerner and Ulrike Malmendier studied 5,897 HBS students from 1997 to 2004. Among students with no prior entrepreneurial experience, those placed with more classmates who had founded businesses were less likely to start a venture after graduation. The decline mainly reflected fewer failed attempts; successful entrepreneurship increased slightly, but not by a statistically significant amount. The authors propose that peer interaction may help students evaluate business plans and entrepreneurial choices more effectively.
Their research concerns entrepreneurship generally, not search funds. It cannot be transferred directly to ETA outcomes. It does suggest that a classroom and peer environment need not push more people toward entrepreneurship: it can also help unsuitable candidates stop.
Repeated interaction creates a record beyond the résumé
When professors, classmates, alumni and investors interact with a candidate through courses, projects and events, they see more than credentials. Preparation, responses to disagreement, collaboration, willingness to revise a view and honesty under uncertainty all leave a record.
Keith Burns and A. J. Wasserstein describe how a searcher may come to know future investors during one or two years of an MBA through individual conversations, conferences and investor participation in class. By the time formal fundraising begins, both sides may already have observed one another for a meaningful period.
Selection before entry creates a starting point. Courses help candidates clarify the path for themselves. Repeated interaction helps others see how candidates perform in real tasks. When all three occur together, an MBA can become an informative signal to investors for reasons that extend well beyond the courses listed on a transcript.
The path from entering an MBA to closing a deal can take nearly four years
Many people enter a full-time MBA precisely to rethink the next stage of their career. Those two years are not only a curriculum. They are deliberately purchased time away from an existing trajectory.
HBS’s full-time MBA takes two years. For the 2026–27 academic year, its official annual cost-of-attendance budget for a single student is $130,318, including tuition, insurance and basic living costs. That figure excludes foregone earnings and the opportunity cost of a post-graduation search.
Stanford’s 2026 study reports a median gap of one year between MBA graduation and search launch for the latest cohort. Among acquisitions completed since 2020, the median period from starting a search to closing a transaction was about 20 months.
TIME AND COMMITMENT
From entering an MBA to closing an acquisition can take three to four years
- Enter a full-time MBA
Typically two years, with tuition and the opportunity cost of leaving a career.
- Launch a search after graduation
For the latest cohort, the median gap from MBA graduation to launch was one year.
- Find and acquire a company
For acquisitions completed since 2020, median search-to-close time was about 20 months.
- Become the company's CEO
Assume years of operating, governance and ownership responsibility.
These figures come from different cohorts and should not be added as though they produce an industry average. They do show the order of magnitude. For someone completing a two-year MBA, beginning a search soon after graduation and acquiring a business roughly 20 months later, the journey from business-school entry to becoming an operator can approach four years. A later launch makes it longer.
That commitment is difficult to treat as a casual experiment. Candidates absorb tuition and lost earnings, interrupt a career, negotiate family mobility and income changes, consider whether to search with a partner, learn unfamiliar industries and transaction skills, and decide whether to continue after repeated rejection. They must also ask what comes next if no acquisition closes—and whether they will remain in one region and operate for years if it does.
Time creates information that a classroom alone cannot. Peers, professors, alumni and investors can observe how someone uses time, keeps commitments, revises judgment after setbacks and maintains relationships. Duration brings cost, but it can also make commitment and judgment visible.
The cost should not be romanticised. An expensive, extended path can exclude strong candidates who lack family support or cannot absorb an income interruption. MBA status may therefore signal wealth and social resources as well as education. Some fellowships explicitly try to reduce that barrier by extending financial support into the full-time search period.
The MBA’s signal in search funds may consequently combine pre-existing selection, education and peer interaction, willingness to accept substantial time and financial costs, a reputation built through real work, and access to mentors and investors. Current evidence cannot apportion the effect among those factors or tell us how much is produced by classroom content alone.
Beyond North America, continuity matters more than copying the degree
The North American experience does not imply that every emerging ETA market needs to reproduce an American MBA. A strong management programme does not automatically bring local ETA cases, alumni who have completed acquisitions, repeat investors, post-graduation search support or conferences where the same participants meet over many years.
A market can have searchers and capital yet still lack the setting in which candidates become prepared and investors get to know them over time. The more useful question is not which institution must perform every function. It is whether the functions can accumulate across projects and cohorts.
FUNCTION MAP
Eight functions can be distributed, but continuity needs a long-term anchor
| Function | Common North American model | Possible model elsewhere |
|---|---|---|
| 01Make ETA legible to candidates | Courses, cases and alumni accounts | Business schools, open courses, industry communities and short programmes |
| 02Help candidates self-select | Peer discussion, projects, internships and live cases | Fellowships, accelerators, real company work and sustained industry exposure |
| 03Prepare people to operate and own | ETA courses and experience from professors, CEOs and directors | Mentor networks, long-term support organisations, repeat investors and operator-led projects |
| 04Build a credible record over time | Two-year MBAs, class projects and repeated alumni and investor interaction | Longer fellowships, real projects, investor collaboration and professional communities |
| 05Reduce the financial barrier to a full-time search | Scholarships, fellowships and search support | Grants, living stipends, accelerators and institutional support |
| 06Provide mentorship and fundraising preparation | Repeat investors, alumni, professors and directors | Repeat investors, long-term support organisations, family capital and professional directors |
| 07Accumulate local knowledge | Cases, research, databases and courses | Local cases, data tracking, operator reflection and independent research |
| 08Maintain industry exchange and relationships | Conferences at Stanford, IESE and elsewhere | Recurring industry conferences, CEO roundtables, and investor and operator communities |
Different institutions can divide the work. A business school might teach and convene. Investors may provide capital and governance experience. Accelerators, professional advisers and operator communities may support other stages. What is easiest to lose between programmes is continuity: candidate records, mentor relationships, local cases and experience from completed searches.
A long-term anchor does not need to own the entire ecosystem. It needs to preserve relationships and knowledge across cohorts and make it possible for experience to return. It could be a school or an independent organisation that maintains candidate records, mentor relationships and local cases. If several institutions share the work, one participant still needs clear responsibility for maintaining those records and relationships over time.
For markets outside North America, the strongest test is therefore whether experience comes back into the same long-lived network. Can candidates be observed through substantive work rather than one-off introductions? Do people who complete acquisitions return to support those who follow? Can new experience become local cases, data and better judgment instead of disappearing with a programme or leadership change?
This mechanism addresses talent preparation and knowledge accumulation. It cannot substitute for the market infrastructure that an acquisition also requires: workable debt, tax treatment, capital structures, governance and transaction practice. Business schools became important in North America not because a degree supplies all of those pieces, but because some schools have remained present long enough for people, experience and trust to keep circulating around them.
Sources
- Peter Kelly, Stefanos Zenios and Dom Ng, 2026 Search Fund Study: Selected Observations, Stanford Graduate School of Business, 2026.
- Stanford Graduate School of Business, Search Funds Keep Offering a Proven Path to Ownership, 2026.
- Daniel Lazier, Jacob Thomas and A. J. Wasserstein, A Detailed Analysis of ETA CEO Demographics and Financial Outcomes, Yale School of Management, 2026.
- Fetch Strategies, ETA Hub, VAULT and related ETA programmes.
- Josh Lerner and Ulrike Malmendier, With a Little Help from My (Random) Friends: Success and Failure in Post-Business School Entrepreneurship, NBER Working Paper 16918, 2011; later published in the Review of Financial Studies, 2013.
- Harvard Business School, Search Fund Fellowship.
- Polsky Center for Entrepreneurship and Innovation, ETA Fellows Program, Chicago Booth.
- HKUST Entrepreneurship Center, HKUST ETA Fellowship.
- Harvard Business School, MBA Program and Annual Cost of Attendance, 2026–27.
- Dylan Walsh, Stanford GSB’s Search Fund Conference Focuses on CEOs, Stanford Graduate School of Business, 2025.
- IESE Business School, International Search Fund Center and Search Fund & Entrepreneurial Acquisitions Bootcamp.
- INSEAD Centre for Entrepreneurship, Entrepreneurship Through Acquisition & Search Funds Hub.
- INSETA, INSEAD Collaboration and Our Approach.
- Chicago Booth Entrepreneurship Through Acquisition Club, Booth–Kellogg ETA Conference.
- Kellogg School of Management, Entrepreneurship Through Acquisition Club and related resources.
- CEIBS, The Inaugural CEIBS–IESE China (Asia-Pacific) Search Fund Forum, 2024.
- SIG Partners, SIG Operations Partners Overview.
- Keith Burns and A. J. Wasserstein, Exploring Post-Exit Dynamics for Search Fund Entrepreneurs, Yale School of Management, 2024.
- Jan Simon, Search Funds & Entrepreneurial Acquisitions: The Roadmap for Buying a Business and Leading It to the Next Level, Tellwell Talent, 2021.
