However, a growing trend is reshaping this narrative, Entrepreneurship Through Acquisition (ETA). ETA offers aspiring entrepreneurs a non-conventional way to run a business, by allowing them to acquire, and then manage, an existing company – often as CEO.

ETA has the potential to revolutionise the startup scene, allowing individuals to bypass the early hurdles of startup life, and instead, leverage established operations, customer bases and revenue streams.

So, how fast is ETA actually growing? And what are the key benefits?

The growing global reach of ETA

ETA originated at Stanford Graduate School of Business in the 1980’s from Professor Irv Grousbeck. Irv worked with a student to develop a brand new investment vehicle which allowed the student to buy and then manage a company and termed this a ‘search fund’. Following initial success, this concept took off and began to form an integral part of American business dialogue, and a foundational component of the ETA process in many cases.

While ETA has long been prominent in the United States, we’re also now seeing its influence spreading globally. Europe, particularly in countries like Spain and the United Kingdom, has seen a recent surge in ETA activity. According to lese’s Business School’s 2024 study of international search funds, a record breaking 59 international search funds launched in 2023. There are now 67 in Spain and 35 in the UK since the advent of ETA, with a significant portion of these being raised since 2018.

And this surge in ETA activity is now driving demand for MBA education around the subject. Our very own data shows an over 100% increase in enrolment to Chicago Booth’s School of Business ETA course, from 64 students in the 2019-2020 to 135 in 2023-2024 academic years.

This global expansion and dramatically increased interest in ETA MBA courses signal that Entrepreneurship Through Acquisition is becoming a staple of entrepreneurship worldwide.

But what's driving this rapid growth?

Why ETA is gaining ground

One key driver is that many baby boomer business owners are now beginning to plan their retirement from business and look for an heir. Many have encountered succession issues and have been looking at options to selling up, many of whom prefer selling to individual entrepreneurs over big corporations or private equity firms. This creates a strong market for ETA practitioners who can bring fresh leadership and innovation to already established businesses and allows business owners to secure their legacies without needing to take the private equity route.

As well as this, demand and interest from investors has grown rapidly, with many seeing search funds as a lucrative asset class which offers both high returns and stability. Hand in hand, these two factors have created a perfect storm allowing ETA to thrive.

ETA’s unique value for entrepreneurs

ETA’s primary appeal lies in its unique value proposition. Whilst any form of business ownership comes with risk, the benefits of ownership through ETA are undeniable. Unlike startups where entrepreneurs must build from the ground up, ETA allows them to focus on scaling and innovating within already successful operations. To many, this is a risk-mitigated path to business ownership, as acquiring an already successful business naturally relieves pressure and offers more stability.

Unlike riskier startups, which often take years to turn a profit, ETA can offer quick and robust financial returns. This is highlighted by the 2024 Stanford Search Fund study, which revealed a return of investment (ROI) of 4.5x on search funds in 2023.

It’s just the beginning for ETA

ETA has the potential to revolutionise the business landscape for startups and already established businesses and support broader economic growth.

But there will no doubt be challenges on the way – after all, integrating into an existing company culture, managing already-established workforces and adapting to institutionalised operational structures is no mean feat, even for the most entrepreneurial of minds.

So, there is more we need to do to facilitate ETA growth. Education, communication and building business networks to discuss ETA and its challenges – and learning from one another’s insights – will be key to this.

Spreading the word about ETA and shouting about the positive impacts it can have on the business world is a primary focus for us at Chicago Booth, and a real privilege and honour. And the journey has only just begun.

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