Acquisition Entrepreneurship – what is it and why do it?

I am a baby boomer, and among the oldest ones since my father entered WWII early and returned in 1943 on a stretcher following his third airplane crash.  I was born in 1944. There were lots of babies born in the 1940’s and they are now retiring, and business owners are selling their businesses. This unprecedented retirement rate of 11,000 people per day, suggests a $10 trillion Tsunami of transfer funds.

Forty-three percent of small businesses in the USA are owned by baby boomers, and thousands of them are up for sale. This is an opportunity for what is called acquisition entrepreneurship. The link at the end below promotes a landmark book by Walker Deibel, Buy Then Build, which describes this phenomenon and the inherent opportunity.

Cassidy also describes a bit of it in a news feed I received last month.


By Cassandra Cassidy

September 19, 2023

MBA grads used to buy new suits for their desk jobs. Now, they acquire entire companies.

That’s part of a recent business phenomenon called “entrepreneurship through acquisition,” or ETA. Unlike the venture capital model, ETA involves buying an existing company rather than starting one from scratch. And it’s surging in popularity in business school lecture halls.

How does it work? MBAs are taught how to find a company to acquire (known in the biz as “a search”) and then go Jerry Maguire-mode to show ’em the money. Assuming they’re not one of the four lucky Wharton students who get $50,000 to jumpstart their ETA search, most students will either:

  • Self-fund, usually with the help of a Small Business Association loan, or
  • Use a “core” search fund, which includes two rounds of fundraising from investors.

Why is it popular? Hiring for elite MBA grads slowed in 2023, leaving some young people eager to flex their business bona fides in other ways. Grads say acquiring small businesses offers a sense of purpose they can’t get at most consulting or banking gigs. The timing works out: Lots of baby boomers are looking to sell their companies and retire.—CC


So, why might this be interesting to BAM entrepreneurs?  At this years’ Lion’s Den, one presenting company, SuperGreen Solutions, was an acquisition by some Kingdom-minded owners. A well-established coffee company in Nepal, Top of the World Coffee, has been coached by IBEC and is now for sale as the owner retires. These are just two examples representing many more.

The high rate of failure for startups is well known but should not necessarily discourage those who do so with loans, venture capital or bootstrapping.  But there may be another way – Acquisition Entrepreneurship. Entrepreneurs should at least check it out.

Larry W. Sharp, BAM Support Specialist, IBEC Ventures

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