Financial or industrial buyers

Roughly speaking, there are two types of buyers - financial and industrial buyers. However, before delving into the buyers, it is a good idea for a seller of a business to clarify why he/she wants to sell. This way, you can better identify the buyers who would be the ideal new owners of your business. You can target the sales material to this specific group of buyers and thus, better control your sales process. The big question to ask yourself is: Do you want to be a part of the future journey, or do you prefer to move on to something new?

Motives for selling
  • Financial ressources for growth financing
  • Needs for competences and knowledge
  • Lack of motivation
  • Elimination of risk
  • Minimization of risk
  • Makximize your returns

What is your motive for selling?

Financial buyers

There are many versions of financial buyers, but what they have in common is that they have capital available that they want to invest with the aim of increasing their earnings potential. They are  looking for the best investment that, combined with their own core competencies, can grow the value of the company the most. This group spans a very broad range from private and angel investors, pre-seed and seed investors, venture capital firms, and private equity firms, etc. In the podcast series, we meet representatives from this group who talk about what is important to them when they are looking for suitable companies to invest in.

Industrial buyers

This group often consists of other companies or competitors that can achieve synergies by acquiring your business. They may lack your customers, products, or your company's competencies in order to add further competitive advantage to their own products. Or it may be that your business is well established in a geography that is unknown or difficult territory for the buying company to penetrate. It's worth noting that if you sell to this group, the chance of doing another sales round later is much lower than with financial buyers. This buyer group is often preferred if you feel tired or burned out after many years of hard work and your would like to take your chips off the table.