What supports searchers financially while they are sourcing deals in a search fund?

The correct answer is the search fund salary, as it directly provides the financial support necessary for individuals to focus on sourcing and evaluating acquisition opportunities without the pressure of immediate income from other sources. When searchers embark on their venture to find a company to acquire, they typically need funding to cover living expenses and operational costs during the search period. The salary is structured to enable them to dedicate their full attention and time to the search process, allowing for thorough due diligence and networking.

Investment capital is primarily allocated for the actual acquisition of a business rather than for the search phase itself. Equity shares might be a part of the compensation structure once a deal is made, but they do not provide immediate financial support during the search. Bonus incentives are generally linked to successful transactions or performance milestones and would not help support searchers during the sourcing phase. Therefore, the search fund salary is critical for empowering searchers to operate effectively and pursue acquisition targets without financial strain.