Library Tools for ETA Searchers

If you have dreams of becoming an entrepreneur or small business owner, you don’t always need to invent a product from scratch.

Instead, you might consider pursuing Entrepreneurship Through Acquisition, or ETA.

ETA is a business model where, instead of starting a new company, you purchase an existing one with the intention of growing and improving it. This kind of entrepreneur can sometimes be referred to as a “searcher,” because they’re “searching” for their new business. And while perhaps not the stereotypical path for an entrepreneur, ETA is actually “one of the fastest-growing paths to entrepreneurship.”

However, ETA requires a lot of research and due diligence — and this is where the Penn Libraries can help. This blog post goes through the ETA process, highlighting where and how you might use library tools to inform your decisions. 

Understand the ETA Model

First, it’s important to understand how ETA works.

Through the Penn Libraries, you can freely access books, case studies, articles, and videos related to ETA. These resources can help you answer questions like:

• What does the typical ETA process look like?
• How are searches usually funded?
• What kinds of companies should I target?

We recommend library books like the HBR Guide to Buying a Small Business and A Practical Guide to Buying a Business, but try searching the library catalog, too!

More recommendations can be found in our ETA guide. 

Follow the Conversation

As you pursue ETA, you should stay plugged in to what’s going on in your target industries, as well as the world of business generally.  News articles can help you stay up-to-date and answer questions like:

• How might this recent world event impact my target industry?
• Who are the most prominent figures in my target industry, and what were factors in their success?

The Penn Libraries subscribes to some of the most prominent newspapers and news websites, including The New York Times, The Washington Post, The Wall Street Journal, Bloomberg.com, and more! For each site, be sure to follow the instructions for activating your account through Penn’s subscription. 

Choose Your Industry

Before beginning your ETA search, you should consider what your ideal target business looks like. For example: Where is it located geographically? What's its revenue size? How many employees does it have?

Researching various industries can help you narrow down the qualities of your ideal business. Industry research can answer questions like:

• Where is this industry geographically concentrated?
• How might this industry change, according to analysts?
• What factors make companies successful in this industry?

For this kind of industry research, we recommend library databases like IBISWorld.

Find Companies that Fit Your Criteria

Once you have an idea about the kind of company you want, you can really start searching in earnest.

Searchers sometimes pay business experts to do the bulk of the searching; these experts find and vet potential targets, sharing the most promising ones with the searcher.

However, if you want to conduct your own direct search, you can use library databases like Data Axle Reference Solutions. Company directories like this can answer questions like:

• How many businesses meet the criteria of my ideal target business? Who are they?
• In general, how old are those businesses? Which ones have been owned by the same person for a while (and thus might be looking to sell)? 

Assess if a Target is Viable

Once you find a promising business, you’ll start discussing the acquisition nuts-and-bolts with its current owner. You’ll want to assess the business’s health and viability, so the owner will give you information about its finances, including its Income Statement and Balance Sheet.

You don’t have to look at that financial information in isolation. For example, IndustriousCFO uses real companies’ financial data to provide median income statements and balance sheets for a variety of industries. You can compare your target to this benchmarking data to assess how the business’s finances compare to its peers.

Learn How ETA Deals are Typically Financed

According to HBR’s Guide to Buying A Small Business, most searchers finance their purchase through a combination of debt and equity.  

• Debt usually comes in the form of a loan. For example, the U.S. Small Business Administration (SBA) works with banks across the country to provide relatively inexpensive SBA-backed loans that can be used to acquire a small business. 
• Equity comes from investors; you may have already worked with some to financially support you during your search. You can use library tools like PitchBook to identify Penn alums who might want to invest with you.

Ensure a Smooth Research Workflow

Follow these tips to avoid technological hiccups:

• Always access databases through our website so you’re recognized as part of Penn’s subscription. 
• If you hit a paywall or get an error message, try clearing your internet browser’s cache and cookies. 
• For research support or troubleshooting help, you can schedule an appointment with a Lippincott Librarian or email lippincott@wharton.upenn.edu.

ETA is an information-dense process. Using data and industry research to guide your decisions can make a significant difference as you search for the right business to acquire — and Lippincott Library’s resources are well-suited to support that work.