What do you need to know before selling your business to an ETA buyer?

Most owners have received the email. It usually starts with something flattering: "I love what you've built…" Then comes the ask: a quick call to learn more about your business.

Increasingly, those emails are coming from ETA buyers — entrepreneurs using entrepreneurship through acquisition as their path into business ownership. Instead of starting a company from scratch, they look to buy an existing business and run it themselves.

In this episode of Built to Sell Radio, John Warrillow talks with Will Smith, host of Acquiring Minds, one of the leading podcasts covering entrepreneurship through acquisition. Will has interviewed hundreds of ETA buyers and brings rare insight into how they think, how they finance deals, and where deals fall apart.

Whether you're actively considering selling your business or just exploring your options, this conversation covers what every owner should understand before entertaining an offer from an ETA buyer:

• How to tell the difference between a funded searcher and a self-funded buyer — and why it matters for your deal structure
• Why some ETA buyers use heavy debt to acquire a business — and what that means for you as a seller
• How to spot the hidden risk in a seller note — a key piece of most ETA transactions
• How to evaluate whether a young buyer has the leadership experience to run your company after you exit
• How to protect your employees from a buyer who may not fit your culture
• Better questions to ask before signing a letter of intent (LOI) with an ETA buyer
• How to judge whether a buyer can actually close — not just sign

ETA buyers can be a great fit for owners of profitable niche businesses that may not attract private equity or a strategic acquirer. They're often motivated, passionate, and willing to pay fair value for the right business.

But they come with real risks. A buyer may need your financing — in the form of a seller note — to get the deal done. They may still need to raise money after you sign an LOI. And they may look great on paper but struggle to lead the team you've built over years.

That's why this conversation is worth your time. Before you take the next call from someone who says they "love what you've built," listen to this episode.

Will Smith is the host of Acquiring Minds, a podcast dedicated to entrepreneurship through acquisition. He has interviewed hundreds of search fund entrepreneurs and self-funded searchers, making him one of the most knowledgeable voices on the ETA buyer landscape.

Built to Sell Radio is hosted by John Warrillow, author of Built to Sell: Creating a Business That Can Thrive Without You. Each week, John interviews business owners who have navigated the process of selling their company — sharing what worked, what didn't, and what every owner should know before they sell.

Keywords: ETA buyer, entrepreneurship through acquisition, selling your business, search fund, seller note, business acquisition, how to sell a business, Built to Sell Radio, Will Smith Acquiring Minds, exit strategy, business exit planning

Knowing what kind of seller you are turns out to be one of the most important things you can figure out before you ever take a meeting with a potential acquirer. There are three: the transactional seller who wants the money and the door, the transitional seller who wants to land the plane, and the transformational seller who sells to go bigger.

Cameron Passmore built one of the largest independent wealth management firms in Canada, roughly 3,000 families and about $8 billion under management, and owned half of it. Most founders in that seat cash out and leave. Cameron sold to OneDigital at 60, and has no intention of going anywhere. He rolled 40% of the deal into equity, and now uses OneDigital's capital, deal expertise, and acquisition currency to buy other firms. He has acquired five and roughly doubled the business in under two years.

"When I sell the company, then I'll be happy." Psychotherapist Jo Swann says that one phrase is the most reliable predictor of a miserable exit. She would know. She made her money in the 90s, retired to an oceanfront apartment in Borneo, and fell straight into an existential crisis.

In this episode of Built to Sell Radio, part of our popular After the Deal series, Swann explains why the trap survives the wire transfer

Every founder fixates on the multiple. Tim Hellebrand will tell you the (second) most important number on a letter of intent is the one almost nobody understands until it is too late: working capital.

When Tim and his four brothers took their $105 million family appliance business to market, six letters of intent came back, and the spread between the lowest and the highest was 60 percent. Most of that gap had nothing to do with the multiple. Don's Appliances ran on a mountain of inventory, refrigerators and ranges and washers sitting across two distribution centers, and every buyer had a different view of how much of that had to stay locked in the company on closing day. Whatever stayed in was money the brothers did not get to take home. Tim assumed they would simply get their inventory money back. That is not how it works.

A lot of owners are losing sleep over AI right now. They watch search traffic erode, they see competitors automating, and they wonder if the business they spent twenty years building is quietly becoming obsolete.

Jaryd Krause sees it differently. He's a buyer. And when he looks at a 20-year-old company run by an owner who is "scared of AI and selling because of it," he sees an acquisition opportunity, not a write-off.

Krause has been acquiring online businesses since 2014.

When Sean Kernan wanted out of the financial advisor support business he co-founded in Dallas, he didn't shop it to outside acquirers, and he didn't wait for his five partners to make him an offer. He engineered the buyout himself. Three and a half months from the first conversation to the wire hitting his account, $500,000 in cash, no earn-out, no holdback.

In this episode, you discover how to:

• Open the conversation with your partners without triggering a defensive reaction or a stall

• Anchor your price to a prior valuation event so the number is hard to argue with

• Use a deliberately low ask as leverage to get speed, certainty, and 100% cash upfront

• Identify which one of your partners is most likely to write the check, and approach them first

• Source the cash from a platform partner, franchisor, or custodian who holds the underlying assets

• Negotiate a "ceasefire" non-compete that protects the buyers without trapping you

• Read inbound acquirer silence as market signal before you push the group toward a full sale

• Spot the partner who is too eager to buy, and what that eagerness usually means

There's an old idea in M&A called the Rembrandt in the attic. A company owns something valuable — a brand, a patent, a customer list, a data set — and nobody inside the business sees it for what it is. The right acquirer walks in, looks at the same asset through a different lens, and recognizes a masterpiece.

Dori Yona spent six years and raised $14 million building what he thought was a price protection company for consumers. Earny tracked everything its users bought online and automatically clawed back refunds whenever the price dropped within the retailer's protection window.

The model never quite worked. After two rounds of layoffs, a shutdown plan presented to the board, and a move out of the Santa Monica office, Dori pivoted to selling the one thing the company had in abundance: SKU-level purchase data on 3.5 million users.

That pivot found the acquirer.

To a consumer packaged goods (CPG) giant trying to understand what shoppers were actually putting in their carts during COVID, the data was the prize. The consumer app was almost incidental.

Aaron Leibtag was one of the most popular guests in Built to Sell Radio history. He sold his 15-employee bootstrapped healthcare AI company, Pentavere, for $15 million.

Pentavere built AI to unlock patient data trapped inside PDFs and clinical notes years before large language models existed.

The headline number was $15 million. What it did not reveal was the structure underneath. Part of the consideration was paid in the volatile stock of the acquirer. Aaron and his partners also rolled 49% of their equity into the new entity. Now Aaron returns, and you might be surprised to learn how it all played out.

When it comes time to sell, most business owners want 100% cash at closing. Almost no one gets it. Most deals come with structure, and structure usually comes down to three levers: what currency the buyer pays you in (cash versus stock), how they keep you tied to the future after giving up control (earn-out versus equity roll), and what rights either side has to unwind the relationship later.