Joe Chao has left Wall Street to launch a search fund and pursue an entrepreneurial venture. Chao was a healthcare investment banker at Barclays after completing his MBA at Yale. He discovered the search fund concept in his second year of the MBA program. After taking Entrepreneurship through Acquisition, a course that focuses exclusively on the concept of young MBAs purchasing a business to operate, he was curious. “I’ve started a small business previously. It was after college, and it was more of a professional services firm focused on brand management and graphic design. It wasn’t a huge business, but it gave me an enticing introduction into entrepreneurship. At Yale, I explored a bunch of professional paths and really latched onto search funds. It’s an amazing model and path for young aspiring entrepreneurs. I thought about jumping in after Yale, but I wanted some more professional experience, so I hit Wall Street. After a few years as an investment banker, I’m ready to leave the corporate world and immerse myself in a search fund project,” said Chao.
Chao decided to partner with Search Fund Accelerator (SFA), a Boston-based search fund incubator that has developed a proprietary approach to help entrepreneurs source deals, evaluate opportunities, close, and most importantly, profitably grow a business. “I’m looking to mitigate some risk in the entrepreneurial context. This is fundamentally a risky venture. By partnering with SFA, I have experienced and knowledgeable investors in my corner who are investing capital and time in my personal and entrepreneurial development. SFA has a bench of professional talent ready to help me. The accelerator has also partnered with senior lenders, lawyers, and other resources that put me on a fast-track trajectory to success. I feel like I’m part of a supportive community that’s invested in and oriented around my development and success. It’s a wonderful feeling,” Chao commented. “There are two more things that I absolutely love about the SFA model: I have immediate access to dozens of SFA entrepreneurs for advice and mentorship, and the SFA boot camp, which kicks off the accelerator cohort. It’s a crash course in entrepreneurship and search funds, sort of like your MBA applied in the real world.”
Chao, who previously worked at Accenture as a consultant before entering Yale, is used to triaging a situation and evaluating challenges, opportunities, and solutions. His goal is to buy a profitable, small-to-mid-size business where he can apply his management and leadership experience. Chao is focusing on businesses with approximately $5‒20 million in yearly sales and a history of growth. Chao is industry-agnostic in his search but intently focused on acquiring a business with recurring revenue, secular growth trends, low capital requirements, and healthy profit margins. “I want to own a small business and use my professional and academic experiences to build, grow, and lead. Wall Street was great, but I‘m ready for my next chapter. Yale SOM’s mission is to educate leaders for business and society, and I’m ready to lead,” Chao declared.
Searching to purchase a business is an arduous task, and running a small business, which is often under-resourced, is equally daunting. Chao is no stranger to tackling formidable obstacles. At age 16, Chao and his twin brother began living on their own due to difficult family circumstances.
Jay Madsen, an SFA partner, commented regarding Chao, “Our team is excited about Joe. He’s smart, gritty, and has a way about him that will serve him well with potential sellers and employees. Joe’s our third Yale entrepreneur, and we hope to recruit more in the future. I’m excited to see what business Joe acquires and how his journey plays out.”
Chao reflected, “Yale did a fantastic job of preparing me to be an entrepreneur. The courses were intense and demanding but positioned me for success as a leader. The professors I connected with were all supportive and encouraging. Most of all, the SOM student community was the best. I made lifelong friends and connections and learned as much from my peers outside the classroom as I did from the faculty in Evans Hall. Yale introduced me to the search fund world and propelled me to where I am today. My goal is to pay it forward and help other Yale students as much as Yale has helped me.”