Solving Succession: How Novastone Capital Advisors is Redefining Operator-Led Buyouts

Private equity often skips this segment, and traditional search funds struggle to scale within it. Novastone Capital Advisors (NCA) is stepping into that gap with a new kind of model that backs experienced operators, not just aspiring entrepreneurs–giving them the capital, structure, and support to acquire and grow founder-led businesses.

On a recent episode of the Investors & Operators podcast, Maxwell Taylor, Managing Director at Novastone Partners, explained how NCA is helping solve succession by turning experienced mid-career operators into owners.

A Model Built from Experience

“Novastone was developed to be the optimal solution to succession in a market where traditional private equity doesn’t necessarily lend itself well,” said Taylor.

Christian Malek, the Founder of NCA, was formerly the CIO of a family office. He started seeing promising search fund deals and was drawn to the idea of backing the next generation of leaders, but this was also personal. “His grandfather died in the CEO seat with no successor in place,” Taylor shared. That real-world experience shaped NCA’s mission: to help more businesses transition successfully and sustainably.

The result is a hybrid model that merges the discipline of private equity with the entrepreneurial drive of search, while bringing in operators who’ve already run companies.

Backing Operators, Not Just Searchers

Unlike traditional search funds, Novastone doesn’t look for MBA graduates raising capital for the first time. It looks for mid-career operators.

“We think of these folks as mid-career,” said Taylor. “They’ve had a successful career; usually 20-plus years in a specific industry. By and large, they’ve really had P&L ownership.”

Many have been CEOs or second-in-command at family-owned businesses. Most have built real value but missed out on true ownership. “Maybe they got a great cash bonus out of a deal,” said Taylor, “but they didn’t really feel like an owner in the way they maybe deserved.”

That background doesn’t just benefit investors; it builds immediate credibility with sellers. “They’re having a peer-to-peer conversation really early on,” Taylor said. “It provides a lot of comfort… that they’re talking to somebody who really could be the next steward of their business.”

How It Works

Since 2020, Novastone has backed nearly 75 operators and closed 24 acquisitions. Most deals fall between $15–40 million in enterprise value, with EBITDA typically in the $2.5 to $7 million range. Operators join the program for a two-year search phase and earn a salary for the duration of their search. They work with NCA’s internal team of over 45 people to develop a thesis, identify targets, and structure deals.

Novastone syndicates each acquisition on a deal-by-deal basis, drawing capital from high-net-worth individuals, family offices, and other funds. Operators are not required to invest their own capital: “we’re solving for who’s the best operator, regardless of their financial status,” Taylor emphasized. They start with 10% equity at close and can earn up to 20% if investor IRR milestones are met. “The incentive alignment is second to none,” said Taylor. “It allows them to gain really meaningful ownership.”

Not Your Typical Search Fund

While traditional search funds may offer a higher equity percentage, they also tend to cap out at smaller deals, around $15–20 million in enterprise value. “That’s where our beginning point is,” said Taylor. And while classic searchers often operate with limited infrastructure, NCA offers a full support system from day one. “We underwrite the best possible opportunities,” Taylor said. “It’s a fully baked-out program.”

Novastone also takes a more proactive approach to recruitment. “Not everybody knows what a search fund is in that operator world,” Taylor noted. “They might say, ‘I’d like to run a business. I’d like to buy a business. But I don’t really know how I’m going to actually execute that all on my own.’ And for any of those scenarios, we’re a really excellent fit.”

When It Doesn’t Work

NCA currently has around 30 active operators searching, and Taylor was candid about the challenges. “Search is hard. Finding good deals is difficult, and it’s a grind.” Sometimes the market thesis doesn’t hold up. Sometimes the operator decides that search isn’t the right fit. But Taylor keeps it in perspective: “You’re going to be operating for 10 years. You’re only going to be searching for maybe a year to two years. In a large way, it’s sort of a drop in the bucket of the overall career.”

Looking Ahead

Novastone isn’t just filling an investment gap. It’s building a new path for operators to become owners. For experienced leaders who’ve built businesses for others, but never had the chance to buy their own, it’s an opportunity to take a real swing.“We’re all owners here in this deal,” said Taylor. “We want them to feel ownership from day one, and we provide a lot of upside if the targets are hit.”

If you’re a mid-career operator looking for your next chapter, the opportunity might be closer than you think. Learn more about NCA’s operator-led model at https://novastone-ca.com/