Transforming opportunities: Why ETA is key for Singapore’s next-gen enterpreneurs

SINGAPORE stands at a crossroads. Built on the entrepreneurial grit of first and second-generation business owners, many iconic brands and family-run businesses now face a looming challenge: succession. A growing number of business owners – once the architects of Singapore’s economic miracle – are reaching retirement age. Yet, for many, finding someone to “take over” their legacy is proving elusive.

This issue isn’t new, but the urgency underscores the importance of Entrepreneurship Through Acquisition (ETA) – a practical pathway enabling aspiring business leaders to buy into established businesses rather than starting from scratch. ETA offers a win-win solution for outgoing founders and budding entrepreneurs alike.

The business proposition, which has its roots in the search fund model, originated and was popularised in the 1980s by Irving Grousbeck, then a professor in Harvard Business School. Essentially, the search fund is an investment vehicle where an entrepreneur (or a group of them), backed by investors, would go search for, evaluate and acquire an existing business. They would subsequently step in as CEOs to manage and grow the business, with plans to exit them some years later.