Ep 1.2 • Buying a Company with Your Spouse | Pat & Enrico: The First Search Fund Couple
Meet the first search fund couple on this episode of How I Met My Co-Founder - a behind-the-scenes interview with a couple who bought (and sold) a business together, and are planning to do it again!
Listen now on Spotify / Apple / YouTube / Google / Pod Website.
Brought to you by Confidante, preventing the co-founder conflicts that kill 65% of startups.
Meet us in person at MIT's 8th Annual ETA Conference Feb. 15th: Get Tickets Here
Patricia Riopel & Enrico Magnani are founding partners of Magnum Capital.
Patricia and Enrico made waves in 2017 as the first search fund couple! Post-business school, they found themselves in separate careers in separate continents with Enrico returning to McKinsey Italy and Pat operating companies across Africa and Latin America. When thinking about how to bring their lives back together, they were reminded of an MBA class they took on search funds.
A Search Fund, also known as Entrepreneurship Through Acquisition (or ETA), is a model where investors provide individuals with capital to buy and grow an existing company. For Pat and Enrico, it was the perfect balance of entrepreneurship and growth, and allowed the couple to take control of their own destiny. The two acquired their first company in 2017 and sold it in 2023 - becoming the first married couple to not only acquire a business, but also to successfully sell one with this model.
They’re now working together again! But this time as search fund investors through their private equity fund, Magnum Capital. If you’re interested in buying and growing a company, reach out to Patricia & Enrico (contact info below) or join us in-person at MIT’s ETA Conference Feb. 15-17.
In our conversation, we discuss:
• Why buy an existing company (versus start one from scratch)
• The pros (and cons) of a partnered search
• What makes a good partner (in a professional sense)
• How to approach disagreements when your business partner is your spouse
• Communicating openly with investors about relationship status
• Come meet us (Pat, Enrico, & Annie) at MIT’s ETA Conference (Feb 15th)
Some takeaways:
1. Search funds (or Entrepreneurship through Acquisition) can be a powerful alternative to starting a company from scratch, while still getting the elements of control and wealth that entrepreneurs often seek. Join us at MIT’s 8th Annual ETA Conference (Feb. 15-17) to learn more!
2. Partnered searches (and co-founders, for that matter) are not right for everyone - specifically, there are financial downsides and decision making can be slower. But for the right pair, it can result in far superior outcomes. If you do want a partner, do a deep look through your existing network first!
3. Trial periods are incredibly important to understand how someone works - in good and bad times. Do this BEFORE making any commitments (see: How to Structure Trial Periods with a Potential Co-Founder article).
4. In times of disagreement, you must be willing to change your mind! This is especially important when employing a decision-by-consensus approach (different than our team in Episode 1.1 who preferred a “disagree and commit” model… different models work for different team structures!)
5. Have the hard conversations up front (e.g., concerns over work-life balance) so you have a shared agreement to go back to and check in on even if informally (see: The 9 Hot Button Conversations All Co-Founders Should Have article)
Where to find Patricia, Enrico & Magnum Capital:
• Patricia Riopel: https://www.linkedin.com/in/priopel/
• Enrico Magnani: https://www.linkedin.com/in/emagnani/
• Associés Magnum Capital Partners: https://www.linkedin.com/company/magnum-capital-partners | Magnum Capital is a private equity fund specializing in entrepreneurship through acquisition (ETA). They empower and create opportunities for the next generation of entrepreneurs to purchase and grow established lower mid-market businesses.
Where to find Annie Garofalo, host & startup team relationship expert:
Website: https://www.confidante.info
Newsletter: https://confidante.substack.com
LinkedIn: https://www.linkedin.com/in/annie-garofalo/
Instagram: https://instagram.com/thecofounderconfidante
TikTok: https://www.tiktok.com/@the.cofounder.confidante
Twitter: https://twitter.com/anniegarofal0
YouTube: https://www.youtube.com/@TheCoFounderConfidante
In this episode, we cover:
00:00 Episode Highlights
00:24 Introducing: How I Met My Co-Founder
00:43 Meet Patricia & Enrico: The First Search Fund Couple
02:18 The Origin Story: Meeting in at IESE
02:59 What is a Search Fund / Entrepreneurship Through Acquisition (ETA)?
05:45 The Decision to Take Control and Work Together
07:52 Work-Life Balance Concerns
10:22 The Importance of Passion and Fulfillment in Work
12:35 Start a Company or Buy One?
14:54 The Decision to Do a Partnered Search
21:12 A Recent Disagreement: Choosing the Next Step
27:09 Communicating the Relationship Status to Investors
29:06 Advice for Potential Entrepreneurs
30:31 Meet us at MIT’s ETA Conference (Feb 2024)
References & Resources:
• MIT’s 8th Annual Entrepreneurship Through Acquisition Conference: https://www.mitsearchfunds.com/2024-etamit-summit | Get Tickets: http://tinyurl.com/2vnv3ehe
• How to Structure Trial Periods with a Potential Co-Founder: https://confidante.substack.com/p/trial-period-for-cofounders
• The 9 Hot Button Conversations All Co-Founders Should Have: https://confidante.substack.com/p/partnership-agreement-cofounders
• The History of Search Funds: https://www.gsb.stanford.edu/experience/about/centers-institutes/ces/research/search-funds
Podcast produced by www.confidante.info. For inquiries about sponsoring the podcast, email podcast@confidante.info.
Annie may be an investor, advisor, or coach for the companies discussed.
Get full access to podcast summaries and founding team research and resources by subscribing to the newsletter at www.confidante.substack.com
