SEARCH FUNDS AS A SUCCESSION SOLUTION FOR GERMAN SMES: A QUALITATIVE ANALYSIS OF FEASIBILITY CONDITIONS

This dissertation investigates whether and under which conditions the Search Fund model constitutes a viable external succession mechanism for small and medium-sized enterprises (SMEs) within the German Mittelstand. Against the backdrop of a widening succession gap in Germany and the limited, fragmented empirical evidence on Search Funds in this context, the study examines how owner motivations and control-related preferences influence openness toward the model, which firm-level characteristics determine target suitability, and how practitioners assess feasibility, risks, and execution challenges. Adopting a qualitative and interpretivist research design, the study draws on semi- structured expert interviews with key actors in the German Search Fund ecosystem, including searchers, operators, and transaction advisors. The interview material is analysed using qualitative content analysis supported by MAXQDA and structured around a five-dimensional analytical framework encompassing (1) target attractiveness and business quality, (2) financial and data readiness (pre–due diligence), (3) succession fit and owner motivation, (4) commercial viability and market dynamics, and (5) deal feasibility and risk assessment. The findings indicate that the feasibility of Search Funds in the German context extends well beyond financial criteria and is strongly shaped by the interaction between business quality, transparency and information-sharing willingness, trust-based alignment between owners and searchers, and deal execution constraints, including investor alignment and risk-mitigation mechanisms. By integrating these dimensions into a coherent assessment logic, this thesis contributes to the emerging literature on Entrepreneurship through Acquisition in Germany and provides practical insights for searchers, advisors, and SME owners considering external succession solutions.