MBA: Entrepreneurs Purchasing Small Companies

SPONSOR: https://marcinkoassociates.com/micro-credentials/

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MBA graduates 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 and 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 venture capital 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. Graduates 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.

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https://www.routledge.com/Risk-Management-Liability-Insurance-and-Asset-Protection-Strategies-for/Marcinko-Hetico/p/book/9781498725989

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