The Searcher’s Dilemma: Brokered vs. Proprietary Deal Sourcing in ETA

You’ve decided to become an entrepreneur and buy a business. Good news – entrepreneurship through acquisition (ETA) is one of the greatest opportunities of the next decade. 

Here’s the biggest unspoken truth of this journey: finding a good business is harder than buying one.

Whether you’re cold outreaching to dozens of business owners or combing through listing sites until the middle of the night –  sourcing high-quality deals takes both patience and strategy.

I’ve seen this as an Mergers and Acquisitions (M&A) advisor and founder of Breakwater M&A where I’ve closed over 50 deals. After years of working with some of the most successful acquirers in Canada, I’ll tell you this: the best searchers don’t choose between proprietary and brokered deals — they learn to master both strategies.

Let’s break it down.

The Fork in the Road: Brokered vs. Proprietary Deals

Many ETA searchers believe there’s a binary decision between finding an ‘off market’ deal (proprietary search) OR working with a business broker who is representing a seller (on-market deal) – but that’s not necessarily the case. 

Here are the pros and cons of both approaches: 

1. Proprietary deals

This is where you go straight to the source — reaching out directly to business owners who aren’t actively selling.

Upsides:

• Way less buyer competition
• Potential for more attractive deal structures (higher amounts of seller financing)
• You can build a direct connection with the seller

Downsides:

• You’ll spend time educating owners on how to sell
• You’ll field a lot of bad leads (unqualified or unwilling sellers)
• Legal and diligence costs can rise without a broker managing expectations

2. Brokered Deals

Think of brokers as the real estate agents of small business sales. They facilitate the transaction, list the business, screen buyers, and often already have a process in place.

Upsides:

• The best brokers have organized data rooms with presentations, reports, and financials
• A broker can help you navigate tense negotiations and help educate the seller on the sales process (this is huge)
• They often vet deals for basic credibility

Downsides:

• Less control over the process
• You’ll face more buyer competition
• Bad brokers can kill a deal by being unresponsive or representing you poorly to sellers

So… Which One’s Better?

My opinion is that you can maximize your opportunity by taking a hybrid approach.

Start building a proprietary pipeline while also working select brokered deals. The balance shifts depending on your bandwidth, risk tolerance, and timeline.

What to Ask When Working With Brokers

If you’re buying through a broker, treat them like a teammate — just one you didn’t get to pick.

Here are a few questions I always ask before spending time on a brokered deal:

• What’s your process for this transaction?
• Is there a data room? When will I get access?
• Do you have bank financing options lined up?
• Why is the owner selling? What are their expectations post-sale?

These answers will demonstrate you’re a serious buyer. Plus, you won’t have to worry about frustrating the broker by not understanding the deal process or missing critical deadlines like when to submit offers.

Building Your Proprietary Pipeline: It Starts With the Right Email

The most common misstep I see from ETA searchers? Writing long, overly detailed emails or asking to “pick the owner’s brain” without a clear reason for reaching out.

But the biggest mistake? Not qualifying the owner’s timeline.

Instead of trying to immediately dive into their financials or schedule a coffee chat, keep it simple. Craft an email that does one thing: find out if they’re open to selling in the near future.

If they are — great! You’ve got a warm lead.

If not? No problem. Ask if they’d be willing to keep your name on file for when the time comes.

It doesn’t have to be complicated. Just clear, respectful, and easy to respond to. Think of it less like a pitch and more like planting a seed.

Build a Real Relationship with the Seller

Whether it’s a proprietary lead or a brokered deal, one thing stays the same: you need to build a genuine connection with the seller.

That doesn’t mean overselling yourself or faking common ground. It means being human.

Start by sharing why you’re doing this in the first place. What draws you to business ownership? Why this industry? And most importantly, how do you plan to treat the business once it’s yours?

Even if the business caught your eye simply because it’s profitable (and hey, no shame in that), it still helps to explain why it aligns with your goals.

Clarity and confidence go a long way in these conversations. But so does warmth.

Just like how a business has ‘goodwill value,’ a successful transaction requires a buyer and seller to develop goodwill in their relationship. This will drive better trust and help the two of you overcome hurdles that happen on every deal. 

Trust doesn’t just make for smoother negotiations — it’s often the reason a seller chooses you over someone else.

Final Thought: You Only Need One

A lot of ETA entrepreneurs think they need to build an empire of 100+ businesses. And hey there’s nothing wrong with aiming big. But don’t lose sight of this: it only takes one great deal to change your life.

Finding that great deal requires a lot of work and often means passing on a high number of ‘good’ deals. This takes consistent work and leveraging a hybrid approach of proprietary and broker-led strategies. 

Because the right deal isn’t just about numbers — it’s about finding the opportunity that fits you.