Millennials fed up with the corporate climb are buying their own businesses
In today's big story, 20- and 30-somethings are transforming from corporate cogs to running multi-million dollar businesses.
What's on deck:
Markets: A new contagion is turning formerly healthy private equity firms into the walking dead.
Tech: xAI apologized for Grok's "horrific" rant, and documents show the company pressed staff to install surveillance software.
Business: Want to know if your company is going to conduct layoffs? Here's how to ask.
But first, here's one I made earlier.
The big story
Lexey Swall for BI
Elite millennials' strange career pivot
What's better than building a company? Buying one ready-made.
Welcome to the world of search funds — a pathway for entrepreneurs to skip the startup chaos and buy a company that already exists, one that comes preloaded with loyal customers, steady revenue, and a healthy profit margin.
Just don't expect any of that Silicon Valley sparkle. Many of these opportunities are found in the overlooked corners of the economy. As BI's Aki Ito puts it, the duller the better. Think car washes, plumbing, snowplowing, pool construction, dumpster rentals, and grease trap maintenance.
First, you need to raise a pool of capital from investors. That gives you the time and resources to hunt for the right business. Next, when you find the one, you raise a bigger round to acquire the company outright. Then, just like that, you install yourself as CEO.
Simple in theory. A grind in practice. To find out what it really takes, Aki spoke with the people who've actually been through it.
"I will never work in a corporate job ever again," one CEO said. "There's no amount of money that you could give me."
Lexey Swall for BI
Congratulations, you've bought a company. Now the hard part …
Closing a deal is a milestone — but it's not the finish line. Of all the searchers who buy a company, 31% end up losing money for their investors.
Often, the gravity of the job doesn't hit until after the ink dries. Then it occurs to them: they've taken on millions in investor debt and are suddenly responsible for the livelihoods of dozens of employees.
One man who bought a US company told Aki they had a " crisis of self-doubt." Another would often spend his mornings crying in the car before work.
As the world grows increasingly disillusioned with white-collar work, an entire generation of ambitious Americans is out there searching for a new dream to aspire to, Aki writes.
If that dream is a search fund, you'll want to read this story.
3 things in markets
Beware! Zombie funds are on the rise. Dealmaking slumps, pickier investors, and macroeconomic conditions are turning some private-equity firms into glorified estate sales. Zombie funds can also have a bad impact on your career. Recruiters shared with BI what employees should do.
Could TACO traders get crunched? So far, betting that "Trump always chickens out" on tariffs has paid off for investors. However, Ben Inker, the co-head of asset allocation at GMO, thinks the strategy could backfire if the markets aren't telling Trump to back off.
We're about to find out if the AI hype is worth it. Second-quarter earnings season, which starts this week, will show where Big Tech's huge investments in AI infrastructure are paying off. Investors are also waiting to know whether the technology is gaining wider adoption.
3 things in tech
The DeepMind CEO's quest for control. Demis Hassabis, who founded DeepMind and later sold it to Google in 2014, has become Google's best superpower in the AI race. Company insiders told BI that Hassabis is destined for even greater heights — and he could even be Google's next CEO.
Internal tension at xAI. After Grok posted a string of antisemitic messages on X, internal Slack messages viewed by BI showed mounting employee frustration at the AI company. In a post on Saturday, xAI apologized for Grok's "horrific behavior." Meanwhile, BI also saw an internal document that showed xAI pressed workers to install surveillance software on personal laptops, further ruffling feathers.
AI juggernauts are coming for top Wall Street talent. Companies like xAI and Anthropic are increasingly poaching the best quantitative minds to help them build artificial general intelligence. They've offered recent grads up to $600,000 and millions to more experienced traders.
3 things in business
"Is now a good time to buy a boat?" Posing an indirect question to your manager could be one way to figure out whether layoffs are coming. People who've experienced layoffs say they can spot the signs, but they're not always foolproof. To understand what's going on, workplace experts shared how to subtly raise the subject to your manager.
How CEOs know when it's time to go. Linda Yaccarino stunned last week when she announced she would step down from X after just two years at the helm. BI asked six former CEOs how they knew when it was quitting time — here's what they said.
Can Red Lobster's seafood boils help turn the business around? After facing a series of setbacks last year, the restaurant chain hired CEO Damola Adamolekun in September, who started making a series of changes. One of these was the June launch of its now-TikTok viral seafood boils. BI went to Red Lobster to check them out.
In other news
Anthropic changes hiring policy after BI reported it banned job applicants from using AI.
Meet the leaders of MBB, the consulting giants advising the world's most powerful CEOs.
Now you can get a breath of fresh air at airports — literally.
Amazon's alliance with Anthropic is paying off handsomely for the tech giant's cloud business.
The Gen Z jobs gap: Great Resignation grads got a jump-start while their younger peers face a much tougher market.
How one millennial played the stock market to quit his white-collar job and retire in his 40s.
Tesla is headed to trial over another deadly Autopilot crash.
A Sun Valley veteran gives a glimpse into the business world's most exclusive conference.
Marc Benioff says the narrative that AI will end white-collar jobs is wrong.
He sent a cold email to Sergey Brin asking for grad school advice. Years later, he's leading Android.
What's happening today
Bastille Day celebrations take place in France.
European Commission's pause on US tariff countermeasures ends.
US deadline to file claims against 23andMe. Those who suffered financial or other damages in the company's 2023 data breach can submit a claim as part of the bankruptcy case.
Hallam Bullock, senior editor, in London. Meghan Morris, bureau chief, in Singapore. Akin Oyedele, deputy editor, in New York. Grace Lett, editor, in New York. Amanda Yen, associate editor, in New York. Lisa Ryan, executive editor, in New York. Dan DeFrancesco, deputy editor and anchor, in New York (on parental leave).
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