Exploring Entrepreneurship Through Acquisition
by Nicolette Wong
As it turns out, there are many paths to becoming an entrepreneur. Entrepreneurship is not limited to the traditional Silicon Valley-style model of creating a business from scratch, raising capital, and building it to optimise for valuation — although there is certainly nothing wrong with doing so. Entrepreneurship can also be achieved by acquiring a stake in an existing business and helping it to grow and flourish.
To explore more on the topic of entrepreneurship via acquisition, we conducted a fireside chat earlier this month, featuring a keynote from our Managing Partner, Sameer Narula, as well as two search entrepreneurs, Tomas Zbynovsky and Marat Zalalov, who are currently on the hunt for the right businesses to acquire.
To get a glimpse into what was discussed in the Fireside Chat, here are 5 key takeaways:
There are many paths to becoming an entrepreneur: building your own company, partnering with a corporate parent to create a spinoff firm, or acquiring a stake in an existing business and going on to manage and grow that business — i.e. entrepreneurship through acquisition
There are many target opportunities for acquisition, particularly in Europe, where demographic shifts and career aspirations often break lines of succession for family businesses
Most of the businesses that are acquired through this model are already enduringly profitable and viable, but could still be improved and have great potential for growth — by using new technologies, injecting innovation, adjusting corporate governance, exploring new markets, and so on
Search entrepreneurs who wish to acquire a business can either embark on a self-funded search or an investor-funded search — the latter of which involves the creation of a search fund
August One will soon be launching Search Velocity, an incubator-style platform that will give searchers access to resources and networks to assist search entrepreneurs on their journey
For more on entrepreneurship via acquisition — including the characteristics of the companies that August One looks for in acquisition targets — and to hear testimonials from search entrepreneurs, click through to the video above to watch the full fireside chat.