Justin Schulte '19 Launches Search Fund Project with Search Fund Accelerator
Justin Schulte eschewed the traditional job search during the second year of his Yale MBA program. Schulte instead focused on launching a search fund – a vehicle where he could buy a business with approximately $2 million in EBITDA and immediately become the CEO of the acquired company. He discovered the search fund concept in his first 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 hooked. “I worked at large companies before Yale, and while it was a great learning experience and helped my confidence, I don’t want to go back to the corporate world. I want to be an entrepreneur and a leader. I like the idea of building and creating direct value, for employees, investors, and my family,” said Schulte.
After evaluating several search fund models, Schulte was most excited about being part of an accelerator, specifically Search Fund Accelerator (SFA). “Doing a search fund is pretty risky, there’s a learning curve and plenty of unknowns as you try to find a business with limited time and resources. I thought one way to mitigate some risk was to be part of an accelerator. SFA offers a structured program to launch my search with tools, resources, infrastructure, and mentorship. I will hit the ground running – especially after the 3-week boot camp which is an intensive catalyst program on all things related to search. I will also be part of an eight-person cohort – eight individuals each searching for their own company to acquire – so I will have a built-in peer group all working towards the same goal,” commented Schulte. “SFA has a great track record with their entrepreneurs. All of their first cohort bought companies, three of the four from the second cohort bought companies and the last one is still searching. So nearly 100% of SFA’s searchers have purchased businesses.”
Schulte, who previously worked at Cummins Inc. in a variety of engineering and operations-related roles prior to Yale, is seeking an industrial services business with contractually recurring revenue, healthy EBITDA margins, and some industry growth pattern. “I feel most comfortable in the industrial services space. Between my previous work experience and the MBA program, I think I can lead a 50-person company with approximately $10 million in revenue and create some value through customer service, operations, and growth initiatives. I’m really excited and can’t wait to get going,” Schulte offered.
Schulte, who is married and has three children, will relocate to Boston for his two-year search period in the accelerator. After identifying and purchasing a business, he will relocate again to the acquired business. During the search, Schulte will earn a fairly typical post-MBA salary, and once he acquires a corporation, he will have the opportunity to own up to 25% of the equity in the purchased entity.
Timothy Bovard, SFA’s Founder & CEO, articulated, “I am delighted with Justin. He is a smart and talented young entrepreneur with excellent experience at Cummins. I am looking forward to seeing what business Justin will buy and watch him successfully grow it.”
When asked about his decision to attend Yale, Schulte smiled and offered, “Yale has been wonderful, I’ve learned and grown, it’s exposed me to opportunities, like search funds, that I didn’t even know existed. I’m very grateful to the faculty members and my classmates. I’ve been pushed and challenged in the very best way. Departing New Haven will be bittersweet, my family and I will be leaving behind many people who will be lifelong friends, but I’m ready for the next chapter, and look forward to the opportunity to lead and build an enterprise.”