A Brief History of ETA—and Why Now Is a Critical Moment

Entrepreneurship Through Acquisition (ETA) may feel like a new idea, but the model has been quietly gaining traction for decades. What started as a niche experiment at a few business schools has grown into a movement that’s reshaping how entrepreneurs become CEOs—and how investors access private small business deals.

In this post, we’ll walk through the evolution of ETA, how the model has matured, and why we believe the current moment represents a rare window of opportunity—especially for self-funded searchers and the investors who back them.

How It Started: The Origins of ETA

The ETA model was first formalized in the 1980s at Harvard Business School, where professors helped entrepreneurial students find an alternative to starting companies from scratch. The insight was simple but powerful: instead of building a business, why not buy one that already works?

From those early roots, ETA slowly spread. Stanford GSB became another early champion, eventually publishing what became the definitive longitudinal study on search funds and ETA outcomes. As more students pursued this path—and investors began to see the returns—it moved from the margins to something more formalized.

From Side Project to Serious Path

For years, ETA was mostly confined to graduates of top MBA programs with access to well-connected alumni networks. But that’s changed.

Today:

• ETA is taught or supported at every Top 20 MBA program in the U.S.
• Search fund outcomes are tracked by multiple studies, showing consistent outperformance relative to other private market investments
• Communities, conferences, and newsletters have emerged to support searchers, share deals, and connect with capital

What was once seen as a fallback for students who didn’t land a consulting job is now a sought-after career path in its own right.

The Rise of Self-Funded Search

As ETA matured, a new approach emerged: self-funded search.

Rather than raising money upfront (as in the traditional model), self-funded searchers cover their own search costs and only raise capital when they’ve found a vetted deal. It’s leaner, faster, and—in many ways—better aligned with investor interests.

Self-funded search was once considered a fringe variation, but today it’s where much of the innovation and energy in ETA is happening. And as search fund deal flow has grown more competitive, self-funded searchers are increasingly finding better terms, better businesses, and better investor partnerships.

Why This Moment Matters

ETA has never been more relevant than it is today. Here’s why:

The Baby Boomer Succession Wave

More than 12 million small businesses in the U.S. are owned by Baby Boomers. As they retire, those businesses will either be sold or shut down. Yet 70% have no succession plan in place. That’s a massive opportunity for capable new owners to step in.

Accessible Financing

Thanks to SBA 7(a) loans, self-funded searchers can acquire profitable businesses with as little as 10% down. These government-backed loans offer low interest rates and long repayment terms—making it possible for everyday entrepreneurs to step into multimillion-dollar businesses.

Under-the-Radar Market

Despite strong fundamentals, most small business acquisitions remain ignored by institutional investors. That means less competition and more favorable pricing. Self-funded searchers are well positioned to capitalize on this gap.

Top Talent Is Getting Involved

MBAs, former operators, and professionals from consulting, private equity, and tech are choosing to run small businesses instead of climbing corporate ladders. The quality of people pursuing ETA today is unmatched—and growing.

The Window Won’t Stay Open Forever

As more capital flows into ETA, returns may compress and deal terms may shift. Early movers—both entrepreneurs and investors—have a chance to participate while the market is still under-institutionalized.

What Comes Next?

ETA has moved from fringe to frontier to fast-growing trend. But we believe we’re still in the early innings—especially when it comes to self-funded ETA.

At ETA Funding Partners, we exist to support this next generation of entrepreneurs. We back searchers who are ready to buy great businesses but need fast, flexible capital to close. And we believe this model—entrepreneur-led, investor-supported—is the future of small business ownership.