Kaizen X Capital founder Ilia Lotov on the skills many first-time searchers still need to build
For a new generation of investors, the most compelling opportunity is not building a company from scratch — it is buying one that already works. Entrepreneurship Through Acquisition, or ETA (the practice of raising capital, finding a profitable company, and stepping in as its new CEO), is no longer a niche strategy discussed in a handful of MBA classrooms. INSEAD held its first-ever ETA conference in November 2025, drawing over 250 participants. Wharton hosted its annual ETA Summit in April 2026. A record 94 new search funds launched in a single year. As the model enters the mainstream, the question is shifting from whether it works to whether the operators entering it are ready for what it demands.
IIlia Lotov launched Kaizen X Capital after experience in investment banking at Goldman Sachs, investing at Mubadala Investment Company, and graduate study at MIT Sloan. He has raised more than $520,000 in search-stage capital from fourteen investors, including s16, Gestalt Capital, Legate Partners, and Riviera Capital, for his fund, Kaizen X Capital. He is now applying that background to evaluating a small-business acquisition and preparing for the transition into leadership. Once the right target is identified, the same backers are committed to providing $7 to $10 million in acquisition equity. What persuaded them was not the model itself but the operator behind it. At MIT Sloan, Lotov served as vice president of the ETA Club and twice as a teaching assistant for a course on public versus private capital markets — the mechanics that sit behind every search fund transaction. Before that, he spent six years closing deals at Goldman Sachs and Mubadala Investment Company, one of the world’s largest sovereign wealth funds. Here, he shares what that experience taught him about evaluating, buying, and running a small company.
What Goldman Sachs and Mubadala taught him about small deals
ETA targets typically sell for somewhere between five and twenty million dollars — a fraction of the deal sizes that Goldman Sachs or Mubadala would normally consider. But Lotov argues that the analytical discipline required is identical, and that most of the mistakes searchers make come from underestimating this.
At Mubadala, he worked on software and technology-enabled businesses investments inside a multi-billion dollarinvestment platform. Each deal required building a thesis from scratch and stress-testing it against what management was telling investors. When the two did not align, the discipline was to walk away — regardless of how many months had already gone into the process.
“You learn very quickly not to take financials at face value. They are a starting point, not an answer. In smaller businesses, personal expenses can run through the company, payroll can be structured for tax reasons, and reported margins do not always reflect the underlying economics. The job is to understand what sits behind the numbers.”
Earlier at Mubadala, Ilia Lotov, with the support of his seniors, spearheaded the development of a $600 million technology investment strategy within the fund’s platform and secured leadership approval for it — an exercise that required building conviction around a thesis and defending it before people who had evaluated thousands of pitches. At Goldman Sachs, he built valuation and deal models for mergers and acquisitions in the Investment Banking Division. A joint finance lab project with BlackRock at MIT Sloan added another dimension: constructing an investment scoring framework by decomposing entire industries into what generates value and what erodes over time. All of it feeds into how Kaizen X Capital evaluates targets today.
“That discipline shaped how we defined the search. We are focused on U.S. B2B services companies with more than $2 million of EBITDA and purchase prices roughly in the $10 million to $20 million range. We like that segment because the cash flows are easier to validate, customer bases are often more diversified, and the services tend to remain relevant through a downturn.”
Why the person matters more than the spreadsheet
Lotov recognized something else during his preparation — something that does not appear in any financial model. At MIT Sloan, a BlackRock project had required him to break industries into components, separating durable value from fragile value. Applying the same lens to ETA targets, he noticed that one variable outweighed the rest: the readiness and ability of the person stepping into the CEO chair.
He saw it confirmed from the startup side as well. As a member of the selection committee at the Crimson Founders Demo Session during Investopia 2025 in Abu Dhabi, he reviewed dozens of early-stage ventures. Nearly every one depended heavily on a single founder’s drive and vision. When that person fades, the company stalls. In an acquisition, the dynamic is similar but the stakes are different: a startup founder chose to build the company and wants to stay. A retiring owner chose to leave. That makes the leadership transition not just important but unavoidable.
“Even after a successful closing, the transition can be difficult if the business has been built around the founder’s relationships and instincts. Employees notice the change quickly, and customers often do too. That part of the job is much harder to learn in a classroom than in real operating situations.”
What comes next
Kaizen X Capital is actively searching for its first acquisition, but Lotov is already thinking beyond it. Millions of small businesses will need new owners over the coming decade, and the pool of qualified operators remains far smaller than the opportunity.
“I think ETA will continue to grow, but the real constraint is operator readiness. It is not enough to find a deal and raise capital. The person stepping in needs to evaluate the business carefully, manage the transition responsibly, and be able to run it from day one. If the market gets better at developing that kind of operator, the model becomes much more durable.”
