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On 2026-08-07 Mikk Markus (@PrivatEquityGuy) quoted a traditional search-fund…

2026-08-07 · 15:04 UTC ·@PrivatEquityGuy ·1 min read

Brief

PrivatEquityGuy (Mikk Markus) relays a search-fund operator’s playbook: acquire highly cash-generative firms (roughly $4–5M/year, no capex, negative working capital, collect-upfront), keep the seller on and spend the first year observing and learning, and prioritize buying well over pursuing new short-term tactics.

Why it matters

On 2026-08-07 Mikk Markus (@PrivatEquityGuy) quoted a traditional search-fund operator who spent the first year after closing 'doing nothing'—studying the business like a journalist while the seller stayed on.

Key details

  • The operator’s buy criteria: heavily cash-flow generative businesses doing $4–5M per year, minimal or no capex, negative working capital, and models that collect money upfront and pay suppliers later.
  • Core lesson: prioritize buying quality businesses and steady, proven operational fundamentals rather than chasing every new tactic, technique, or 'shiny object.'
Source evidence

Which also reminds me of the beautiful thing about buying and investing in traditional cash flow businesses...

There is no need to constantly chase every new secret, tactic, technique, technology, method, tip or theory.

It’s precisely because... when you learn from operators who made the most money over the long run, you see that they were just focusing on what works.

Different from folks who are constantly looking for shiny objects (“what’s working now”) and can’t maintain the slow (and often boring) grind for the long haul.

PrivateEquityGuy (Mikk Markus) (@PrivatEquityGuy)

Finished a podcast with a traditional search fund operator who said that during the first year post-close (the seller stayed on), he and his partner did not do a thing...

He said they were like journalists, just taking notes, studying, learning the industry, learning the business.

When asked why and how they were able to do that?

  1. Buy well.
  2. Buy a good company well (heavily cash flow generative, with $4-5M per year. No capex, negative working capital, collect money upfront, pay it out later).

— https://nitter.net/PrivatEquityGuy/status/2085734821288980560#m