When you think of an entrepreneur, you probably picture someone starting a company from scratch in a garage. But there's another path, one that can be faster and less risky: buying an existing business. This is called entrepreneurial acquisition.

Instead of building everything from the ground up, you acquire a company that's already operating. It has customers, employees, and cash flow. Your job as the entrepreneur is not to create something out of nothing, but to take something that exists and make it better, bigger, or more efficient.

Successfully acquiring and growing a business requires the same core traits that define any entrepreneur. The context is just different.

Innovativeness: In an acquisition, innovation isn't always about inventing a new gadget. It's about seeing new potential in an old business. Maybe you'll introduce a new marketing strategy, streamline operations with modern software, or expand the product line to serve a new type of customer. You're innovating on the business model itself.

Proactiveness: This is the drive to find the right company, negotiate the deal, and lead the transition. It involves actively hunting for opportunities rather than waiting for them, performing thorough due diligence to understand what you're buying, and having a clear vision for the company's future from day one.

Risk-Taking: Acquiring a business isn't risk-free; it's just a different kind of risk. Instead of facing the risk of finding a market for a new product, you face the risk of overpaying for a company or failing to improve it. A successful entrepreneurial acquirer is skilled at identifying, analyzing, and mitigating these risks.

There isn't just one way to buy a business. The path you take often depends on your capital, experience, and network. Here are three common models.

Another popular model is the search fund. This is a unique investment vehicle where an entrepreneur raises a small pool of capital from investors specifically to fund a search for a business to acquire. These initial investors get the right of first refusal to invest in the actual deal once a target company is found.

Finally, there are private equity-backed acquisitions. In this scenario, an established private equity (PE) firm either acquires a company and hires an entrepreneur to run it, or they back an experienced executive (often called an “executive in residence”) to find and lead an acquisition. This model is typically for larger businesses and involves less personal financial risk for the entrepreneur, but also less autonomy and a smaller share of the equity.

Each of these models provides a different framework for an entrepreneur to step into a leadership role through acquisition. The right choice depends on your goals, resources, and tolerance for risk.

Ultimately, entrepreneurial acquisition is a powerful strategy. It allows you to apply your vision and drive to a business that already has momentum, offering a unique path to building a successful enterprise.