Blind pool

Definition

Money raised to buy a business that nobody has identified yet.

Why It Matters

It is what a traditional search fund is, and the reason its terms look the way they do: backers are buying the searcher rather than a deal, so they take a step-up on conversion, information rights, and a say in what gets bought. It also explains why the raise is hard for a first-timer with no record, and why the deal-by-deal route exists for people who would rather find the business first.

In numbers: A $500,000 search fund is a blind pool: eighteen backers fund two years of looking on the strength of the searcher, the thesis, and the terms, with no business named.