Entrepreneurship Through Acquisition (ETA)

The ETA Thesis

Starting a business from scratch has a high failure rate — most businesses don't survive 10 years. An existing business with 10 years of operating history, proven customers, and trained employees has already passed the hardest tests of commercial viability.

ETA buyers purchase that proof at the price of a multiple on earnings. The bet: the buyer can run the business as well as the current owner (or better), service the acquisition debt, and either grow it or eventually sell it at a higher multiple.

Key ETA Entry Points

Self-funded ETA: Individual buyer uses SBA financing (10% equity, 90% SBA loan) to acquire a business and step in as owner-operator. Most common path; best returns if the deal is good and the buyer executes.

Search fund: Institutional model where investors fund a searcher to find, acquire, and operate a business. Searcher trades equity for capital and support.

PE-backed search: Growth equity funds backing acquisition entrepreneurs at larger deal sizes ($5M+ EBITDA), with follow-on capital for add-on acquisitions.

What ETA Is Not

ETA is not a passive investment. The buyer typically replaces the owner as the primary operator — working full-time in or on the business. The "entrepreneurship" is in running and growing an operating company, not in the initial founding. Buyers who expect passive income from an SMB acquisition without active involvement typically fail.

The Silver Tsunami Tailwind

An estimated 10,000 baby boomer business owners will retire daily through the early 2030s. Many businesses will be transferred to family (succession) or sold to outside buyers. The supply of quality businesses for sale is structurally increasing — creating favorable deal flow for ETA buyers.