Deal Sourcing Infrastructure for Search Funds Under $10M

Traditional search fund playbooks assume access to intermediary networks, alumni databases, and proprietary deal flow from operating partners. If you're raising a $3M–$8M search fund targeting boring businesses in the lower middle market, none of that infrastructure exists. You build it yourself — or you spend 24 months cold-calling from a spreadsheet someone sold you on LinkedIn.

The infrastructure stack

Proprietary sourcing at search fund scale requires four layers: a target database, an enrichment layer, an outreach system, and a CRM that tracks every touchpoint. Most searchers have a CRM and nothing else. That's why pipeline feels like luck.

Layer 1: Target database

You need every operator in your thesis geography and vertical — not a sample, not a 'top 50 list.' For HVAC in Texas alone, that's 3,000–8,000 licensed contractors depending on how you define the market. Your database should include contact fields, digital presence signals, and a freshness timestamp.

Layer 2: Enrichment

Raw business names aren't leads. Enrichment adds: phone, email, website status, review velocity, owner neglect score, and ideally legal entity data. This is where off-market edge compounds — you're not calling the same list as every other searcher.

Layer 3: Outreach system

• Tier 1 (high neglect score, no website): personalized direct mail + phone follow-up within 7 days.
• Tier 2 (solid operator, aging digital presence): email + LinkedIn if owner is identifiable.
• Tier 3 (active digital presence): lower priority unless other signals emerge.

Layer 4: CRM discipline

Every contact gets: date first touched, channel, response status, next action date. Search funds that track this religiously convert 2–4% of outreach to meetings. Those that don't track convert under 0.5% and blame 'market conditions.'

What to avoid

• Buying bulk lead lists — they're sold to 50 other searchers simultaneously.
• Outsourcing sourcing entirely before you understand the trade.
• Spreading across 5 verticals before you've closed one deal in one vertical.