What motivates a seller to sell?

searcher profile

January 21, 2025

by a searcher from University of California, Los Angeles in Los Angeles, CA, USA

In your deal xp, what have you guys found to be the motive the seller sells, if any? If the business I'd be looking for has all the characteristics of a business I would want to take over, I wonder, why would the seller want to sell if business is booming (other than age/retiring owner) ? These characteristics are: Recurring revenue, no dependability on small number of clients, solid profit margin and SDE, growth YOY, etc, all textbook in what we look for. I'd love to hear some perspectives on this! Thanks

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Reply by a professional
from University of Maryland at College Park in Danville, CA, USA
- Fatigue: No matter how remunerative successful entrepreneurship can be, work is work and some founder/owners just get fatigued from their company

- Other projects: Some founders want a new challenge or want to focus on a business that they like better.

- Death/divorce/disease: These can cause a big change.

You'll know a seller is motivated when their answer to "will you sell me your company?" is something like "Is your money green?"
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Reply by an investor
from McGill University in San Diego, CA, USA
AJ Wasserstein has written extensively about this. Check out his two notes: On the Nature of Seller Selection in a Search Fund Project; On the Nature of What Business Sellers Are Looking for in a Buyer
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