If you’re getting emails from young MBA grads that want to buy your business, you’ve likely become a target of an acquisition entrepreneur.
The rise of “entrepreneurship through acquisition” in top MBA programs signals a shift in career aspirations for business majors. Many graduates now prefer buying and building businesses over conventional career paths in consulting or finance.
These individuals, like this week’s Built to Sell Radio guest, Harvard MBA Steve Divitkos, come armed with fresh ideas, investor backing, and an eagerness to dive into entrepreneurship. If you’re a business owner, understanding the nuances of selling to an acquisition entrepreneur is important.
Pros:
- Fresh Perspective: Acquisition entrepreneurs often bring new energy and innovative approaches that can rejuvenate a stagnant business.
- Funding: They typically have access to funds, providing a straightforward path to liquidity for you.
- Continued Legacy: Many are committed to preserving the company’s core values and building on its legacy, ensuring your business’s long-term impact.
Cons:
- Mismatched Expectations: These buyers might have high expectations for growth and returns, potentially leading to aggressive strategies that clash with the company’s culture.
- Limited Experience: While academically qualified, they may lack practical experience and risk missteps that could affect the business negatively.
Just like selling to private equity, an individual investor, or a strategic acquirer, understanding the playbook of the acquisition entrepreneur ensures you go into a deal with your ideas wide open.
Listen to Steve as he reveals the typical blueprint for the acquisition entrepreneur:
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Quote of the Week
“I often refer to the difference between an operator and an investor as the difference between a chef and a food critic. Food critics can talk intelligently about meals, talk about how they’re composed, and give thoughtful opinions on them. But if you put them behind a twelve-burner stove with a chef that just quit and an assistant that just cut their finger off, they’d have absolutely no bloody idea what they’re doing.”
Clip of the Week
In this clip, Steve Divitikos talks about how search fund operators convince business owners to sell their businesses to them.
Deals
- VMtecnologia, a Brazilian technology provider for the self-service industry, was acquired by Nayax Ltd. (Nasdaq: NYAX; TASE: NYAX). The deal’s total potential value is about USD27.8 million. This includes an upfront payment of approximately $13.4 million and additional payments of around $14.5 million over the next three years, contingent on certain conditions. In 2023 VMtecnologia’s EBITDA was around $2.5 million, implying Nayax Ltd. paid over 11 times EBITDA for the business.
- OpSec Security, a provider of brand protection and authentication solutions, was acquired by Crane NXT (CXT), an industrial technology company, for $270 million in cash. With OpSec’s 2023 revenue at approximately $100 million, the acquisition values the company at over 2.5 times its revenue.
