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Novastone Capital Advisors: Q&A With CEO Christian Malek

By Tom White, Special to California Business Journal

Can you share your journey and what led you to start Novastone Capital Advisors (NCA)?

I started NCA after years in the private equity industry, inspired by my grandfather, a Swiss entrepreneur who passed away while running his business. This experience helped me understand the importance of effective succession planning, especially when the next generation may not be ready to take over.

I spent most of my teenage years in Costa Rica, where my father worked as a diplomat before I moved back to Switzerland. After earning an Executive MBA at IMD Business School, I met a business operator who understood the succession challenges SMEs face. We believed the traditional search fund model could be streamlined to be more accessible for mid-career professionals, which led to the launch of NCA in 2019.

Christian Malek

Drawing on our experience and networks, the company grew and expanded operations to the US in 2021. With around 45 employees, 40 program participants, and 21 acquired companies, NCA has become a powerful option for mid-career professionals interested in pursuing Entrepreneurship Through Acquisition (ETA). It’s the largest program globally, with an estimated 20% market share.

What skills or perspectives do you bring to the search fund space?

I care deeply about succession planning for family-owned businesses and have developed a deep professional expertise in the field.

My background as an investment banker specializing in SMEs allowed me to understand the financial and operational challenges during leadership transitions. I’ve been involved with search funds since 2011.

The founding of NCA was driven by the desire to create a structured program that would empower entrepreneurs and their families to navigate succession complexities.

How do you define a successful search fund, and what metrics do you use to measure that success?

It is defined by its ability to achieve several key outcomes driven by financial and operational performance. In the context of our ETA Program, a successful search fund typically demonstrates the following:

1. Identification and Acquisition of a High-Quality Business
2. Clear Value Creation Path and Post-Acquisition Growth
3. Strong Leadership and Management abilities
4. Significant Return on Investment (ROI) for Investors with a goal of 35%+ IRR

By striving for these outcomes and metrics, our ETA Program helps searchers achieve and measure their search fund’s overall success.

What key components make up your program? How are they designed to support search fund entrepreneurs?

There are six stages, and searchers are supported throughout the process by NCA and our various teams:

1). Entrepreneur Selection: NCA rigorously screens and selects top-tier mid-career professionals from the pool of program applicants (typically <1% of candidates).
2). Onboarding: In this stage, Entrepreneurs develop their Investment Thesis, which details their industry experience, their target businesses, and how they plan to create value post-acquisition.
3). Search: Comprehensive training, guidance, and support is provided to Entrepreneurs to expedite their search and accelerate deal flow.
4). Acquisition: NCA fully underwrites the deal and assists Entrepreneurs with evaluations, negotiations, due diligence, legal and acquisition closings.
5). Growth: The Entrepreneur becomes CEO of the acquired company, and the value creation plan is executed.
6). Liquidity Event: NCA and co-investors assist the CEO with creating and executing an exit plan.

Can you share a few success stories? What factors contributed to their success?

Since 2021, we have closed 21 deals throughout Europe, Canada, and the US. Our program boasts an 80+% success rate in completing acquisitions among participants who reach the acquisition stage.

You can find blog articles on our website that detail the first-hand experiences of moving from a searcher to a CEO, as shared by Entrepreneurs in our Program who have successfully closed their deal: NCA Blog.

The support NCA provides is critical, and our searchers would agree. For example, Nicoletta Nutrito, a female searcher from Italy, said that NCA’s support—particularly the support from the M&A and Investor Relations team—was a key factor in her success. “While I have M&A experience, that’s never been the focus of my career,” Nicoletta said. “I have core experience on the line, on the factory floor, and in front of customers, so support from the M&A team—who were very professional and responsive—was invaluable.”

Another success story comes from ETA Program participant Nate Taylor, from the US, who explained: “NCA’s CEO Christian stepped up at the most critical periods in the deal process to get us to a close. His actions gave me extreme confidence in NCA as a program and organization. Having been through the entire process, from raising the search fund to closing a deal, I can wholeheartedly recommend the NCA program to any mid-career professional interested in ETA.”

We believe success is not based on any one trait but a combination of hard work, strong leadership values and characteristics, valid experience, and luck.

What advice would you give to someone considering joining an ETA program?

To become a NCA Entrepreneur, you must demonstrate certain characteristics, such as strong operational and leadership experience within a specific industry/niche, local market knowledge combined with a cultural fit, and the ability to be flexible, adaptable, and resilient. But it’s not only about experience; you must also be willing to accept rejection gracefully and persevere by keeping your eye on the goal of becoming an entrepreneur through acquisition.

What are the most common misconceptions about search funds that must be addressed?

Many believe that search funds are only for those with substantial financial resources. While search funds often attract high-net-worth individuals, they are accessible to a broader range of investors and aspiring entrepreneurs. The key is having a strong business plan, the right experience, and passion for the field you are pursuing.
Some view search funds as highly speculative ventures. While they involve risk—like any other entrepreneurial venture—the model includes rigorous due diligence and structured processes to mitigate risks. Many search fund investments have proven successful, and average search fund returns (according to the Stanford 2024 Search Fund Study) in the US and Canada are around ~35% IRR.