Breaking Barriers: An Exclusive Interview with the UK's First Female Searcher

Karen became the first female searcher in the United Kingdom, having successfully raised a search fund in January 2023. We wanted to hear more about her journey.

Karen’s Background

Karen Forster was born and raised in London, UK. After graduating from Cambridge University, she worked at Goldman Sachs in M&A before transitioning to Private Equity at Carlyle. Karen then completed an MBA at Columbia Business School, but quickly realized she wanted to pursue something entrepreneurial when she finished her studies. Following graduation, she initially pursued entrepreneurship by joining start-up incubator Entrepreneur First before transiting to Venture Capital. During this time, she delved into extensive research and discovered the concept of search funds. In the summer of 2022, she consulted with various searchers to determine the type of search she wanted to undertake. Ultimately, she decided on a traditional search to benefit from increased guidance from investors.

Have you ever considered a duo search?

Yes, absolutely. The GSB study shows that duo searchers tend to achieve higher return rates, so I seriously considered a partner. At the time, I didn't have anyone in my network with the complementary skillset that was willing to commit to a long-term search. Additionally, a duo search requires targeting slightly larger companies, which in the UK often means competing with lower middle-market private equity firms. Ultimately, I think search funds are flexible. Even though I started my search solo, I remained open minded that if I found the right partner later on, I could bring them on board.

Why did you choose to search in the UK?  What are the benefits and the challenges of searching in the UK?

I considered searching outside the UK, but since I only speak English, North America (Canada and the US) was the only viable alternative market. As a non-American, I didn't feel I fully grasped all the cultural nuances to purse a search there. Additionally, I had family commitments in the UK, so it made sense for me to focus on my home market and contribute to the local economy, which has suffered from a productivity crisis, particularly since Brexit. Having worked for American companies and studied in the US, I felt I could bring American drive, ambition, and positivity to a market I’m very familiar with. The main challenge I’ve faced is the power of institutional investors in the UK, which is something I am still learning to navigate.

How did you look for investors and what do you look for in investors?

Because I discovered search funds by chance, I had many informal conversations with searchers and investors before fundraising, which made the actual process significantly more straightforward.

I was primarily looking for like-minded growth-oriented investors rather than value-oriented ones. I categorized potential investors into three groups: institutional investors, individuals with high-level academic expertise in the ETA / search community, and ex-searchers / entrepreneurs turned investors. The latter group was particularly important because I lacked operating experience, and I knew this would be a concern in conversations with sellers. Additionally, I aimed to maintain some geographical balance. I needed UK-based investors who truly understood the local market and could help with legal documentation and debt financing. I needed European investors who would be invaluable should I acquire a company and expand to the European continent. I also wanted some American investors because I appreciate their mindset and approach to entrepreneurship and business building. Having a well-balanced cap table was very important for me.

The UK is a heavily brokered market, what steps have you taken to overcome that challenge as a searcher?

I had to get creative. I read many books on psychology and sales to understand the psyche of a seller. Additionally, I created as many touchpoints as possible with a seller through email, text, calls, gifts, LinkedIn, and pushing to meet in person. It’s crucial to build a personal connection with the seller, to present yourself as eager for their business, and right fit that will continue their legacy and company culture post-acquisition.

You have recently shifted away from focusing on software in your search efforts. Could you please share what prompted this decision?

In my PPM, I mentioned four industries: software, TIC (testing, inspection, and certification), waste management, and pest control. The plan was to focus on software first, then move on to another industry and tackle 2-3 at a time. I really like software because it ticks many boxes for search, but it is very competitive, even after the interest rates hikes. As a searcher, you need to be ambitious, but you also need to be realistic. Also, you want to consider whether you’re the right fit for the industry you are targeting and whether you fit the employee profile.

The industry is heavily male-dominated. What challenges do women face in ETA, and how can we increase the number of women in the industry?

If more women knew about search funds, more would join because it’s a flexible career path with a slightly less risky version of entrepreneurship as you don’t start a business from scratch. For those who do know about the industry, certain misconceptions need to be debunked, such as the idea that you will end up working in the middle of nowhere, far away from family and friends. Searchers can control, to a certain extent, where they will end up by focusing on specific industries or by deciding whether to partner up or go solo.

I don’t like to think that I have faced challenges specifically as a woman. Typically, searchers deal with business owners who are twice their age, which can sometimes lead to ageism. Knowing how to present oneself is key. While I cannot change how I look, I try to double down on my strengths and remain positive to reach the finish line. Thinking 'because I am a woman, they doesn’t want to sell their business to me' can hold you back as ultimately your thoughts become your reality. Manifestation is key here!

What initiatives would you like to see develop in the ETA industry, particularly for women?

The industry is changing. When I started, there were only one or two female European searchers, and none in the UK. Now, we have our own WhatsApp group, and I share tips with the two other women searchers in the UK. It’s great to see more women entering the industry.

Do you have any words of advice for prospective searchers?

Searchers need urgency, but they also need patience. The goal in search is to acquire the highest-quality business at a fair price within a reasonable timeframe, not simply to acquire a business quickly. Always think long-term.

Secondly, my advice is to just go for it. The downside risk is often lower than perceived. In Europe, we are fortunate to have access to government funded healthcare and other initiatives, providing a safety net for entrepreneurs. If the search journey doesn’t materialize as expected your skills are 100% transferable to full-time employment.

Lastly, be strategic. In markets like the UK and Germany, where brokerage is prevalent, and in Spain, where competition among searchers is high, navigating these challenges requires thoughtful planning, creativity, and adaptability.