Can a business be acquired without debt — and still scale profitably?

October 23, 2025

by a searcher from University of Birmingham in United Kingdom

I’m researching a niche but important topic: non-debt business acquisitions. Most deals today are debt-leveraged — but I’m exploring alternative structures where ownership transfers through equity, profit-sharing, or phased buyouts rather than loans. If you’ve structured or invested in an acquisition without using debt, I’d love to learn from your experience. I’m putting together a short whitepaper and plan to interview a few people who’ve actually done it — not just theory. How did you fund it? What worked, what didn’t, and what would you do differently next time? If you’re open to sharing insights, please comment below or message me directly.

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Reply by a searcher
from University of Maryland at College Park in Havre De Grace, MD 21078, USA

Acquisitions without debt usually require large upfront cash investment or a Growth Equity partnership (SME or capital). Cash acquisitions are at a discount because of the certainty of cash at close, but that discount won’t offset the risk of the seller running with their new stockpile of cash. You can structure the deal to mitigate that risk, but the post-transition j-curve is real even with a smooth transition. The risk of your personal loss of cash is great and if it is the whole nest egg – that’s not a great situation. If you are able to find a small business with high revenue and growth rate, you can a Venture Capital or Growth Equity partner. A Growth Equity partner that is a good fit for the specific business because it creates a partnership of expertise in: deal sourcing, due diligence, deep operational experience in that specific business niche, etc… -- and both of you must be GREAT (not good) members in the partnership (however structured). Growth Equity plans almost always change and adjust during operational execution and require great partners who understand and work well in a fluid environment.

Reply by a lender
from Clemson University in Reston, VA, USA

We actually just had a client acquire a company where the seller rolled 29% equity and then gets the advantage of a better operator. Usually the target is in distress so I’d be extra cautious and only use third party due diligence

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