The Model Is the Same. The Terrain Is Not.

A search fund puts one committed operator in the CEO seat of one established company. That thesis was born at Harvard Business School in 1984, matured at Stanford, and now works in more than 40 countries. The playbook that surrounds it, how you finance the deal, where you find it, what the seller cares about, what the debt looks like, changes completely when you cross the Atlantic.

We invest in both markets: in Spain across the whole journey, and in the United States directly and through our partnership with Mosaic ETA. This post is the comparison we wish someone had handed us years ago.

The Numbers, Side by Side

Start with the two studies that anchor the asset class.

One honest caveat before the comparisons: returns are concentrated everywhere. Strip the 10x-plus outliers from the Stanford data and aggregate ROI falls from 4.75x to 2.8x. The average hides a wide spread, in both markets. Geography does not save a mediocre deal.

Difference 1: What You Pay

Spanish SMB acquisitions typically close at 4 to 6 times EBITDA. Comparable businesses in the US commonly trade at 6 to 9 times. That is not because American companies are better. It is because the US has deeper capital markets, more institutional buyers reaching further down-market, and a larger population of trained searchers competing for the same targets.

Two turns of EBITDA at entry is an enormous head start. It lowers the leverage you need, softens the consequences of a slow first year, and means multiple expansion can work for you rather than against you. It is the single most attractive thing about the Spanish market, and the reason more American capital looks at Spain every year.

Difference 2: How You Finance It

This is the biggest structural gap between the two playbooks.

In the United States, the SBA 7(a) program guarantees acquisition loans of up to $5 million for US borrowers, often with around 10% equity down and ten-year terms, against a personal guarantee. One government program, available at scale, lets an individual with modest savings buy a real company. It is the engine behind the American self-funded search boom, and there is nothing like it in Europe.

In Spain, financing an acquisition means assembling pieces. Senior bank debt from entities that know the model, typically 2 to 3 times EBITDA. Seller financing, the pagaré del vendedor, which does double duty as financing and as the seller's vote of confidence. Earn-outs and rollover where they fit. And equity for the rest, which is where investors like us, and sometimes the equity gap, come in.

The practical consequence: American structures carry more leverage and more personal risk for the searcher. Spanish structures are more conservative by necessity, which costs some return on paper and saves some companies in practice. We have seen both sides of that trade.

Difference 3: The Model Mix

Both markets run traditional and self-funded searches, but the proportions differ. In the US, SBA financing makes self-funding a mass phenomenon: keep 70% or more of the equity, buy a smaller company, carry the guarantee. In Spain, the traditional investor-backed model remains the center of gravity, anchored by an investor ecosystem that has grown up around IESE and two decades of completed deals.

Neither mix is better. The right question for a searcher is not which model is fashionable but which one matches your risk tolerance, your savings, and the size of company you can credibly run.

Difference 4: Where the Deals Come From

In the US, a meaningful share of deal flow moves through brokers, listing platforms, and increasingly organized intermediaries. Competition is visible: when a good business hits the market, you are rarely alone.

In Spain, the best targets are rarely in any database. They are found through direct outreach, trusted advisors, and patience: a founder in his sixties who has never spoken to a buyer and will only sell to someone he trusts with his people. Proprietary deal flow takes longer to build and is worth more once you have it. It is also why bilingual searchers with real local networks have a structural edge here that no amount of capital replicates.

Difference 5: The Person Across the Table

American sellers, on average, have met private equity before. The conversation starts closer to price and terms. Spanish succession sellers are often speaking to their first and only buyer. The conversation starts with the business, the family, and the employees, and price arrives later, once trust exists. Rush that sequence and the deal dies politely, over months.

We wrote a full piece on this: how to win the seller's trust in Spanish business succession. The one-line version: in Spain, empathy is not a soft skill. It is deal execution.

What Travels Well

The good news for anyone operating across both markets: the important things travel.

What does not travel: assumptions about debt, timelines, and how sellers decide. Every transatlantic mistake we have seen started with importing one of those three.

How We Invest in Each Market

In Spain, Santa Marta invests across the whole journey: search capital, acquisition equity, and the equity gap when the cap table comes up short at closing. It is home, and it is where our network runs deepest.

In the United States, we invest two ways: directly in searchers and their acquisitions, and through Mosaic ETA, our partnership backing underrepresented searchers acquiring industrial and services businesses. Same thesis in both markets: operators first, conservative structures, and no clock forcing anyone's hand.

"The model crossed the Atlantic intact. The playbook did not. Knowing which is which is most of the job."