In order to be able to find a suitable buyer for companies, you should consider different types of buyers. Each of them has their own goals and motives and may therefore be the most suitable for different companies and situations.
In the following article, we will briefly and concisely introduce you to the most important buyer groups for your company.
As the name suggests, strategic investors are primarily interested in gaining a competitive advantage by acquiring your company. They typically come from the same or a related industry and, in many cases, may even be direct competitors.
The primary goal of a strategic investor is to gain market share, achieve revenue and cost synergies, acquire new technologies, enter new market segments or customer groups, or integrate strong brands into their portfolio. The sales process with strategic investors can take longer, as acquiring businesses is not their core activity, making them more cautious compared to financial investors. However, selling to a strategic investor can result in a higher purchase price and collaboration on equal terms during the transition phase.
Despite these advantages, dealing with strategic investors requires caution. In some cases, direct competitors may be more interested in gathering information about your business rather than making a serious purchase offer. A structured sales process, managed by your M&A advisor, can help mitigate this risk through thorough pre-qualification.
For financial investors, acquiring business shares is a core activity. Typically, these investors are private equity funds that use high leverage to acquire companies. Their preferred targets are businesses that generate stable and sustainable cash flows.
In recent years, however, this sector has evolved
When business owners successfully sell their company, many immediately seek new projects and investment opportunities. This often leads to the creation of entrepreneurial holdings. The goal of these experienced entrepreneurs is typically to acquire smaller businesses with high potential and leverage their expertise and network to develop them further, ultimately selling them successfully.
ETA, or Entrepreneurship through Acquisition, refers to acquisitions made by successful professionals, experts, and managers who choose to buy an existing business instead of starting one from scratch.
These buyers look for companies with a solid foundation and growth potential that they can scale using their expertise. In the ETA model, the ability to finance the purchase price plays a crucial role and should be secured early in the process.
For larger transactions that typically require financing from a financial investor, the process is known as a professional “Management Buy-In” (MBI). If the buyer comes from the company’s existing management team, the transaction is referred to as a “Management Buy-Out” (MBO).
Venture Advisory Partners is a Frankfurt-based M&A advisory firm. We specialize in guiding business acquisitions, sales, and financing for mid-sized companies and growth enterprises.
Our dynamic team combines expertise from the fields of M&A, Venture Capital, and Finance.
At the heart of our work is freedom—operational, financial, and personal.
We leverage the latest sales strategies and methods to execute business transactions efficiently and profitably for all parties involved.
We support our clients from initial financing to a successful business sale. Through business acquisitions, we enable individuals to enter entrepreneurship under secure conditions.
Find out how we can accelerate your financing and optimize your company sale.
