Buy Then Build
How Acquisition Entrepreneurs Outsmart the Startup Game
by Walker Deibel
“Buy Then Build is a total game-changer. I wish all entrepreneurs would read this.”
“Buy Then Build should have been taught in every MBA program.”
The Startup Myth: Why Starting from Scratch is for Suckers
For decades, the image of the entrepreneur has been synonymous with the startup founder: a visionary toiling away in a garage, fueled by ramen and a world-changing idea, hoping to survive long enough to find product-market fit. We glorify the struggle, the risk, and the astronomical odds of success. But what if this entire model is fundamentally flawed? What if the smartest path to entrepreneurship isn't about creating something new, but about perfecting something that already exists?
In his game-changing book, Buy Then Build: How Acquisition Entrepreneurs Outsmart the Startup Game, Walker Deibel presents a powerful and pragmatic alternative to the startup grind. He argues that "acquisition entrepreneurship"—the process of buying an existing, profitable business and then building upon its foundation—is a faster, safer, and more reliable path to success. Instead of facing the terrifying uncertainty of a blank canvas, you start with a business that already has customers, cash flow, and a proven track record. You skip the riskiest part of the journey and go straight to the business of building value.
What You'll Learn
The Flaw in the Startup Dream: Understand why 90% of startups fail and how acquisition entrepreneurship dramatically de-risks your journey.
Become an "Acquisition Entrepreneur": Learn the mindset and strategies of entrepreneurs who buy, rather than build from scratch.
The Power of Existing Cash Flow: Discover how buying a profitable business means you get paid to be an entrepreneur from day one.
How to Finance a Deal (Even with Little Cash): Uncover the world of seller financing, SBA loans, and creative deal structures that make buying a business accessible.
The "Buy Then Build" Playbook: Get a step-by-step guide to finding, vetting, and purchasing a great small business.
Why Start at Zero? The Acquisition Advantage
The life of a startup founder is a brutal race against time. The clock is always ticking as you burn through cash, trying to find customers and a repeatable business model before your bank account hits zero. Walker Deibel argues that this is an unnecessary and inefficient struggle.
Consider the journey of two entrepreneurs:
Startup Sarah spends her first two years developing a product, burning through her life savings. She has no customers, no revenue, and no proof that anyone wants what she’s building. She is in a desperate search for something that works.
Acquisition Adam spends a few months searching for and acquiring a small, stable manufacturing business that has been around for 15 years. On the day he takes over, the business has 20 long-term customers, a team of experienced employees, and $200,000 in annual free cash flow. He gets a salary from day one.
While Sarah is wrestling with existential risk, Adam is focused on optimization and growth. He can analyze the existing customer list to find upsell opportunities, modernize the company's outdated website to attract new leads, or implement new software to improve efficiency. He is playing offense while Sarah is stuck playing defense.
This is the core of the "Buy Then Build" philosophy. You bypass the entire "0 to 1" phase of creation, which is where most ventures fail, and step directly into the "1 to 100" phase of growth and improvement.
You Don't Need to Be Rich to Buy a Business
The biggest myth that stops people from considering this path is the belief that you need millions in the bank to buy a company. Deibel systematically dismantles this idea, revealing the common financing structures that make acquisitions possible for ordinary people.
The key is realizing that you're not just buying a business; you're buying its assets and cash flows, which can be used to finance the purchase. The most powerful tools include:
SBA Loans: In the U.S., the Small Business Administration (SBA) guarantees loans specifically for business acquisitions. Banks are more willing to lend against a business with a history of profitability than an unproven startup idea. You can often secure a loan for a significant portion of the purchase price with as little as a 10% down payment.
Seller Financing: This is the secret weapon of acquisition entrepreneurs. In many cases, the seller of the business is willing to finance a portion of the deal themselves. They essentially act as a bank, receiving payments from you over time. This shows their confidence in the future of the business and aligns their interests with yours. A deal might be structured with a 10% down payment from the buyer, a 70% loan from an SBA lender, and 20% in seller financing.
Leveraging the Business's Own Cash Flow: Because you are buying a profitable entity, the business itself generates the cash to pay down the debt you used to acquire it. You're using the asset to buy the asset.
The Acquisition Advantage: Key Concepts
Acquisition Entrepreneurship: The process of finding, acquiring, and operating an existing business as a path to entrepreneurship.
Deal Flow: The process of systematically generating and evaluating opportunities to buy businesses. This is the top of your acquisition funnel.
Due Diligence: The critical investigation and verification process you undertake after making an offer on a business. This is where you confirm the financials, talk to customers, and ensure you're not buying a lemon.
Investment Thesis: A clear set of criteria defining the type of business you want to buy (e.g., industry, size, location, key characteristics). This keeps your search focused.
Valuation: The process of determining a fair market price for a business, often based on a multiple of its Seller's Discretionary Earnings (SDE) or Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA).
Your Path to Buying a Business
Deibel lays out a clear, systematic process for finding and buying a great business.
Prepare for the Hunt: The first step is internal. Define your goals, your financial capacity, and your investment thesis. What kind of business aligns with your skills and lifestyle?
Generate Deal Flow: Start looking for businesses for sale. This includes searching online marketplaces (like BizBuySell), networking with business brokers, and directly contacting owners of businesses you admire.
Screen Opportunities: Quickly analyze potential deals against your investment thesis. Learn to read financial statements and identify red flags. Your goal is to efficiently say "no" to dozens of deals to find the one or two worth pursuing.
Make an Offer: Once you find a promising target, you'll submit a non-binding Letter of Intent (LOI). This outlines the proposed price and terms and secures an exclusivity period for you to conduct due diligence.
Conduct Due Diligence: This is the most critical phase. You and your team (an accountant and a lawyer) will dig into every aspect of the business to verify its health and viability.
Secure Financing: With a solid deal and thorough due diligence, you can approach lenders to secure the necessary financing.
Close the Deal and Transition: Finalize the legal paperwork and begin the process of transitioning ownership. A good deal often includes a transition period where the previous owner stays on to help you learn the ropes.
Final Reflections
Buy Then Build is a vital and timely counter-narrative to the prevailing startup-obsessed culture. Walker Deibel provides an impeccably logical and actionable guide for a different kind of entrepreneurship—one built on prudence, proven success, and strategic growth. He demystifies the world of business acquisition, making it feel accessible and achievable. For anyone who has the ambition to run their own company but is wary of the astronomical risks of starting from scratch, this book doesn't just open a new door; it reveals a smarter and more reliable path to the same destination.
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