5 types of Entrepreneurship Through Acquisition

By Tyler Sadek | July 2025

Entrepreneurship Through Acquisition (ETA) is growing fast—but here’s the thing: not all ETA journeys look the same.

In fact, there are several different models that fall under the ETA umbrella. Whether you’re an aspiring operator or a business owner curious about who might buy your company, it helps to understand the main paths people take.

Below are the five most common types of ETA—explained simply, with pros, cons, and who each one is best for.

1. Search Fund ETA

A search fund is when an entrepreneur raises money from a group of investors—not to buy a company right away, but to spend 1–2 years searching for the right one. Once they find it, they raise more capital from the same investors to buy the business and step in as CEO.

Good For:

  • MBAs and professionals who want support and mentorship

  • People who don’t have their own capital to start

  • First-time CEOs with a business background

Pros:

  • Backed by experienced investors

  • Can pay yourself a salary during the search

  • Helps fund bigger acquisitions

Cons:

  • Must give up significant ownership

  • Pressure to find a deal fast

  • Formal oversight and reporting to investors

2. Self-Funded ETA

This is the DIY version of ETA. The entrepreneur uses their own savings (or money from friends/family) to fund the search and purchase of a business. No outside investors means more freedom—but more risk too.

Good For:

  • Operators with personal savings

  • Entrepreneurs who want full control

  • People who value flexibility over structure

Pros:

  • Keep most or all of the equity

  • No formal board or investor pressure

  • Can move quickly on deals

Cons:

  • Lower budget = smaller businesses

  • You carry all the risk

  • No search salary or built-in guidance

3. Corporate ETA (Like Founders Mosaic)

This is when an established team or firm—like Founders Mosaic—acquires and leads businesses as part of a long-term platform. It blends ETA with private equity principles, but with an ownership mindset and often no intention to sell.

Good For:

  • Founders looking for a legacy-minded buyer

  • Teams building multiple long-term businesses

  • Operators who value culture and stability

Pros:

  • Experienced leadership

  • Flexible deal structure

  • Focus on long-term ownership, not quick flips

Cons:

  • Less visibility than traditional PE

  • Deal flow often based on relationships, not brokers

4. Operator-in-Residence (OIR)

In this model, an entrepreneur joins an investment firm before a deal closes. Once the firm acquires a company, the OIR steps in as CEO. It’s a great path for emerging leaders without capital who are ready to run something—once the right deal shows up.

Good For:

  • Future CEOs without the capital to buy

  • People looking to learn inside a structured team

  • Corporate leaders making the leap to entrepreneurship

Pros:

  • Backed by a firm with experience

  • No personal money needed

  • Can earn meaningful equity in a business

Cons:

  • Must wait for the right acquisition

  • May not choose the company you run

5. Family or Employee Succession

Sometimes the next owner is already in the building. In these cases, founders pass the company on to a family member, key employee, or management team. This internal handoff is often funded with loans or seller financing.

Good For:

  • Founders ready to retire

  • Loyal teams who want to own

  • Families seeking to keep control

Pros:

  • Smooth transition

  • Cultural continuity

  • May be more personally meaningful

Cons:

  • Buyers may lack capital or leadership experience

  • Slower or more emotional negotiations

ETA comes in many forms—but they all start with the same belief: Great businesses deserve great successors. If you’re a founder looking for the right person to take over your business, or an entrepreneur thinking about your next step, knowing your options is the best place to begin.