M&A Talk (Mergers & Acquisitions), by Morgan & Westfield

Entrepreneurship Through Acquisition: Insights from Harvard Business School Experts

Aug 8, 2024

Royce Yudkoff and Rick Ruback, both Harvard Business School professors, delve into the fascinating world of entrepreneurship through acquisition. They discuss the benefits of buying established businesses rather than starting from scratch. Insights include the dynamics of search fund investing, the advantages of tapping into the lower middle market, and the importance of connecting with retiring founders. The conversation also touches on the traits of an ideal business for acquisition and the challenges that aspiring entrepreneurs face throughout their journey.

51:04

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Episode guests

Rick Ruback

Royce Yudkoff

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Episode notes

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Quick takeaways

Entrepreneurship through acquisition offers a safer route for new business owners by acquiring established, profitable companies rather than starting from scratch.

Understanding the differences between angel investing, venture capital, and search fund investing is crucial for reducing risk and making informed investment choices.

Deep dives

Entrepreneurship Through Acquisition

The concept of entrepreneurship through acquisition offers a unique pathway for individuals interested in running a business, as opposed to starting from scratch. This approach involves finding a well-established, profitable business owned by a founder nearing retirement and acquiring it. By leveraging the existing foundation of the company, aspiring entrepreneurs can significantly reduce the risks typically associated with starting a new venture. This strategy not only provides access to an operational business but also allows new owners to navigate the complexities of entrepreneurship with increased certainty.

Intro

2min

Entrepreneurship Through Acquisition

14min

Understanding Search Funds and the Portrait of Business Sellers

4min

Navigating the Lower Middle Market

9min

Navigating Seller Decisions: Search Funds vs. Private Equity

4min

Imagining the Perfect Business: Characteristics of a 'Unicorn'

2min

Navigating Business Acquisition Challenges

14min

Exploring Future Trends in the Search Fund Model

3min

If you have any topic or guest suggestions for M&A Talk, please email them to podcast@morganandwestfield.com.

How can you get on the path to entrepreneurship by acquiring an established business rather than building a start-up? Harvard Business School professors Royce Yudkoff and Rick Ruback share their insights into the nuances of search fund investing, including the challenges of finding high-quality, enduringly profitable businesses. They focus on the appeal of the lower middle market, the advantages of finding a founder nearing retirement, and the appeal of the search fund approach toward entrepreneurship.

View the complete show notes for this episode.

Additional Resources:

Selling your business? Schedule a free consultation today.
Download The Art of The Exit: The Complete Guide to Selling Your Business
Download Acquired: The Art of Selling a Business With $10 Million to $100 Million in Revenue
Download Food and Beverage M&A: An Insider’s Guide to Selling a Food or Beverage Manufacturing, Distribution, or Grocery Business.

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