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Start-up founders seeking to
acquire established businesses

Start-up founders seeking to acquire established businesses

Start up founders sometimes purchase businesses rather than doing VC or angel investing. There are two types of Buyers who have experience from prior start ups:

  1. The hands on buyer
  2. The semi absentee buyer or buyer who had a significant amount of original starting capital but cannot thrive in sales or management in the new acquisition.

The hands on buyer who was also a start-up founder generally thinks bigger than the average buyer. They are typically buyers who are used to fast increases. Rather than trying to increase the business by just a bit, they are focused on 3-10x increases in a short amount of time. As a result, they typically push harder for growth.

On the other hand, the start-up founder who thinks that they can run a business from say Guatemala or some remote area will typically lose their investment unless they have such great management that they pay to run the business. Having success as an absentee buyer is more of the exception than the norm. Many people read the ”Four Hour Work Week” and think that this is completely realistic for running a multiple employee business. Unfortunately, most of the people that I see that do this have problems running the business.

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