President Obama at the Kelogg School of Management 10-04

President Obama at the Kelogg School of Management 

President Barack Obama arrived on the Northwestern University campus Thursday to deliver a major address on the economy to students at the Kellogg School of Management.

Obama to Kellogg: Business is the future

The president spoke on the economy to Kellogg students on Northwestern’s campus

Speaking to an assembly of Kellogg students, President Barack Obama on Thursday said the business leaders of tomorrow are the key to a strong economy.

"There is a reason why I came to a business school instead of a school of government," Obama said. "I actually believe business is the greatest force for prosperity and opportunity that the world has ever known."

Obama called for Kellogg students, as future business leaders, to pursue mindful growth.

“As you engage in the pursuit of profit, as you should, I challenge you to do it with a sense of purpose,” Obama said. “As you chase your own success, as we want you to do, I challenge you to cultivate ways to help more Americans chase theirs.”

'A clear-eyed look’

Obama, who delivered the commencement address for the Class of ’06, said he wanted Thursday’s speech to be “a clear-eyed look at our economy.”

In a speech that touched on issues including education, health care and energy, the president also spoke on the importance of parity for women in business, praising Dean Sally Blount '92 for her work in this area.

"Let's do what Dean Blount is doing here at Kellogg," Obama said, speaking of Blount's work with the White House.

He also called out Northwestern’s commitment to nanotechnology, which has helped produce startups such as lithium-ion battery maker SiNode Systems.

‘All in this together’

“But I also believe in a higher principle: we're all in this together,” Obama said. “That's the spirit that made the American economy not just the world's greatest wealth creator, but the world's greatest opportunity generator.”

The speech at Cahn Auditorium reflected the president’s desire to spread his message to the students who will be at the forefront of tomorrow’s growth.

“This is a university that is brimming with the possibility of the new economy,” Obama said as he began his address. “You can’t help but visit a campus like this and feel the promise of the future.”

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With an MBA, Students Build Search Funds to be Entrepreneurs 05-28

With an MBA, Students Build Search Funds to be Entrepreneurs

A business school degree can help newly minted MBAs find investors to buy a company.

Business school teaches students who want to run a search fund and acquire a business how to be good managers, experts say.

When Matt Littell was nearing the end of business school, he could have done what many MBAs do: look for work at an established marketing or finance company, or start his own business.

He instead chose a unusual path for entrepreneurship.​ Littell convinced other people to give him money while he searched for a business to take over, also known as building a search fund.

He started the search fund process during the second year of his MBA program at the Kellogg School of Management at Northwestern University. Before business school, his view of entrepreneurship was more narrow.

"I knew that I wanted to buy and fix small businesses," says Littell. "I didn't know that search funds were an option."

Through his MBA program, he learned of other people who used search funds to find employment and the basics of how the search fund process works. Students typically look for small- to medium-sized businesses. Experts suggest they choose a company in an area of business that they are familiar with. 

​Littell's search fund allowed him to buy Progressive Bronze, which makes and restores hardware used in the Catholic church, such as crosses and candlesticks​. Littell, who also has a master's in engineering, instantly became president and CEO – the kinds of roles MBAs usually go into once their search fund process is complete.

"It’s a terrific way to jump-start​ their career and get into a leadership position much much faster," says William Sutter Jr.​, a senior lecturer in finance at Kellogg.

[Ask these five questions when choosing an entrepreneurship program.]

While anyone can use a search fund to become an entrepreneur, business school experts say getting an MBA can make pursuing this career track easier. Business school teaches students how to be managers and move into the C-suite, which is usually the goal for people who do search funds.

"Business school teaches you the things you need to know to run a company," says Steve Kaplan, a professor of entrepreneurship at the Booth School of Business at University of Chicago. It also provides a network, he says. This network can help students find investors or mentors to help them build a search fund. This school year, Booth launched Booth Search to help graduating students find investors, mentors and other resources for a search fund.

Like Littell, most MBAs start the search fund process while in business school. They look ​for investors to give them enough money that will last them up to two years while they search for a business to acquire.

MBAs that find a company​ return to their investors and ask if they'll agree to buy the business. Some say yes, while others may say no. If some decline, MBAs go on another search to find more investors who will say yes.

Once the investors are ready to go, the student and investors buy the business. The investors own stake in the company and sometimes join the board of directors. The student usually becomes the CEO and runs the company.

It's the elements of running a business that can make a business school background most critical for those interested in search funds. While in school, there are a number of classes students can take to prepare them to be managers​.

Courses that cover negotiations, acquisitions, marketing and private equity are especially helpful, experts say. Some business schools offer classes that specifically discuss search funds.

[Find out how b-schools ranked for entrepreneurship .]

At Kellogg, Sutter​ teaches a course called "Private Equity: The Human Element"​ where students learn about the interpersonal skills needed to be successful at private equity, among other topics. He also has students, such as Littell, who have successfully carried out a search fund come in to share their experience.

Sutter believes strong interpersonal skills are important in this line of work.

"They have to convince a seller that they’re a credible buyer," he says. This can be especially hard to do if you're a student. "You’re a little short of experience to be running an organization," he says.

Students can also take courses that give them a clear idea of the ​day-to-day challenges that managers experience at work, says H. Irving Grousbeck, a consulting professor of management at the Stanford University Graduate School of Business.

"I think it’s also useful to take some hands-on courses that might give you some role playing exercises," he says. In his class "Managing Growing Enterprises" students figure out how to handle difficult issues that a manager might encounter, such as reprimanding an employee who dresses inappropriately or who lacks tact, through role-playing​ exercises.

[​Participate in an business school incubator to become an entrepreneur.] 

No matter how many classes students take​ though, none may fully prepare them for the hardships that come with creating a search fund.

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