LenderHawk analysis. Not affiliated with or endorsed by Search Funded: The ETA Podcast.
Pete Seligman traces his path from civil engineering and infrastructure investing into running and buying small businesses in Australia, then into search-fund investing. He explains why Australia and New Zealand are attractive but still nascent ETA markets, and why patience, trust-building, and hands-on governance matter so much in search fund transactions.
Aspiring searchers, first-time ETA investors, and operators considering acquisition entrepreneurship in Australia or New Zealand who want a practical view of what makes the model work.
Australia and New Zealand have thousands of viable ETA targets because 80,000-120,000 businesses reportedly earn between $1M and $4M, with 60-80% owned by retirement-age owners and more than half lacking succession plans.
In less mature search markets, the main bottleneck is awareness across three groups at once: entrepreneurs, sellers, and investors.
Searchers need patience because seller education and deal progression can take 12 months or more from the first conversation to closing.
A seller’s advisor quality matters as much as the seller’s own openness because many local lawyers and accountants know the client but not the mechanics of a business sale.
Negotiation often masks the real issue; a seller may fight over an unrelated clause to buy time for a different underlying need such as closing date or risk allocation.
Search investors do not need the searcher to have every skill if they can fill gaps through active coaching and a supportive cap table.
Small-business strategy is usually simple, but execution is hard because staffing, promotions, and branch expansion are constrained by a tiny team and local labor dynamics.
The best searchers are coachable, gritty, pragmatic, and comfortable with type-two-fun work that feels painful in the moment but rewarding in hindsight.
A market matures only when entrepreneurs, target companies, and investors are all developing at the same time; weakness in any one of the three slows the whole ecosystem.
When to use: Useful when assessing whether a geography is ready for a robust search-fund market.
Type-one fun is enjoyable in the moment, type-two fun is painful while happening but satisfying afterward, and type-three fun is simply bad and not worth it. Pete uses type-two fun to describe the search journey and the kind of discomfort good searchers must tolerate.
When to use: Useful for evaluating whether a candidate is wired to persist through the grind of search and operating.
Australia and New Zealand are estimated to have 80,000-120,000 businesses with earnings between $1 million and $4 million.
Pete uses this estimate to argue the market is still far from saturated.
60-80% of those businesses are owned by people of retirement age.
He cites this as evidence that succession pressure is large.
More than half of those owners do not have succession plans.
He uses this to explain why ETA can solve a real ownership-transition problem.
Pete said there are now roughly 10-20 searches in the Australian market.
He points to this as evidence of ecosystem growth and increasing familiarity.
A small-business example he gave was an electrical services company with about 25 employees, including 5 administrators and 20 technicians.
He uses the example to show why execution becomes difficult even when strategy looks obvious.
He described deals in Australia where the first conversation happened 12 months or more before closing.
This was used to illustrate why patience is essential in the search process.
Expect seller conversations to take time and plan for a long runway before proposing terms.
Why: Most owners are not process sellers and need repeated conversations to become comfortable with the model and the valuation.
Ask whether a seller has already worked with advisors on a sale process before pushing hard on price.
Why: Prepared sellers tend to have more grounded expectations and faster negotiations.
Check early whether the seller’s lawyer and accountant have transaction experience, and encourage new specialists if they do not.
Why: Trusted long-time advisors often lack the technical skill to manage a business sale cleanly.
Use face-to-face conversations to surface the real issue behind a seller’s position instead of arguing clause by clause.
Why: A visible conflict often hides a different need such as timing or risk mitigation.
Build your cap table with investors who can coach on the specific gaps you have.
Why: A strong search model assumes the investor group can supplement the searcher’s experience rather than expecting the searcher to be fully formed.
Choose a searcher who enjoys execution-heavy work, not just strategy work.
Why: In small companies, strategy can be straightforward while implementation depends on people, timing, and local constraints.
Pete described a deal where the seller kept pushing on a side issue that looked unrelated to economics. After a coffee meeting, the buyer learned the seller mainly wanted to delay the transaction date, and the whole negotiation became understandable once the hidden timing issue surfaced.
Lesson: When a negotiation looks irrational, look for the underlying objective instead of treating every objection as substantive.
He and a friend searched for about six months, reviewed roughly 200 companies, and bought a very small business in June 2013. Over the next decade he ended up buying five businesses and stepping in as CEO three times before moving into search investing.
Lesson: Self-funded acquisition experience can create the operating and negotiation reps that later make someone useful as a search investor.