Individual vs. Institutional Business Buyers


Two specifically defined categories of business buyers exist in the M&A world. Individual buyers are individual people funding the M&A themselves, while institutional buyers are a group of investors that pool money. It is helpful to know the pros and cons of both of these types of business buyers when looking to sell.

Individual Buyer

The biggest risk with an individual buyer is their cash flow. Since they are using their personal finances or a loan to purchase your business, the risk of never seeing all of the promised money exists. On the other hand, an individual investor will be more focused and invested in the business as a whole. An individual buyer is less likely to split apart the company and do whatever they want with it post-closing, whereas an institutional buyer may show less concern about the integrity of the business.

Institutional Buyers

Institutional buyers have a broader resource pool for their M&A process. This can be both good and bad for the seller—the institutional buyer will know how to do the deal in a professional manner, but a less experienced buyer may ultimately accept at a higher price due to inexperience. However, the institutional buyers have a lot more money at their disposal.

Remember to keep these things in mind when looking at potential business buyers for your M&A deal. If you're in need of assitance searching for the right buyer, contact the experts at George & Company.