The founder(s) usually pitch the fund to a handful of initial investors and raise a few hundred thousand to bankroll the search process (their pay, employee pay

The founder(s) usually pitch the fund to a handful of initial investors and raise a few hundred thousand to bankroll the search process (their pay, employee pay, travel and meeting funds, etc...). Once an opportunity is identified they go back to the investors and figure out how to best fund the purchase then stay on to manage/turnaround the business. It's different because they aren't usually putting their money on the line and they get paid to search for opportunities.