Bridging the Entrepreneurship through Acquisition Training Gap in Canada

If you’ve been following our series on Entrepreneurship Through Acquisition (ETA) in Canada, you already know about the looming wave of small-business transitions. With 76% of small-business owners planning to exit in the next decade according to the Canadian Federation of Independent Business (CFIB), and around 54,000 businesses currently for sale (Stats Canada), the need for new entrepreneurs is more urgent than ever. Without new owners, these businesses risk closure, leading to economic and job losses.

Why ETA and Why Now?

Understanding the ETA landscape is crucial, not just for potential entrepreneurs but for the Canadian economy. That’s why we’ve spent six months consulting over 80 experts and digging into relevant studies to bring you a comprehensive view of what it takes to succeed in ETA. Here’s what we found:

ETA entrepreneurs follow different paths, but all must successfully navigate five key milestones, each requiring the right skills, mindset, network, and financial resources.

1. Finding Your Business
   This is often the longest phase, taking one to two years. During this time, entrepreneurs—known as “searchers”—must define their criteria, build a pipeline of potential businesses, and master time management to avoid costly delays. The search process can be direct (using platforms like BizBuySell) or broker-led, with most searchers using a mix of methods.
2. Preliminary Due Diligence
   Once a few businesses meet the initial criteria, searchers conduct preliminary due diligence, analyzing financial statements and operational data. Key skills include financial literacy, business intuition, and benchmarking against acquisition criteria. This stage also involves negotiations, often beginning with a Letter of Intent (LOI), a non-binding document outlining the basic terms of a potential purchase.
3. Acquiring the Business
   If a business passes due diligence, the searcher moves on to a more detailed review, collecting documentation like invoices and bank statements and consulting external experts such as accountants and lawyers. At this stage, a solid relationship with the seller is crucial to access sensitive information. 

   At this stage, it is also crucial to know that you can either buy the company’s shares or just its assets, and it’s important to know the difference. A Share Purchase Agreement (SPA) means you’re buying the whole company—everything it owns, and everything it owes.On the other hand, an Asset Sale Agreement means you are only buying specific things the company owns, like equipment or intellectual property, without taking on all its debts or liabilities. Knowing which type of deal you’re doing is crucial because it affects what you’re getting and what responsibilities you’re taking on. At the final stage of the acquisition, this helps you avoid surprises and ensures you’re getting exactly what you want from the deal.

4. Funding Your Business
   Searchers may fund acquisitions through debt, equity, or seller financing, which involves paying the seller from future profits. The funding process whether raising debt or equity via investors can take a long time, requiring continuous networking and preparation.
5. Running Your Company
   Once the business is acquired, the real work begins. In the first six months, new owners often work closely with the previous owner to learn the ropes. Resilience, patience, and a willingness to learn are key to a smooth transition.
6. Grow Your Company
   After settling into the business, the focus shifts to growth. This stage involves developing and implementing strategies to increase revenue, expand market share, and improve operational efficiency. Whether through introducing new products, expanding to new markets, or optimizing existing processes, the goal is to ensure your company attains the goals you set early on with your investors to ultimately secure the exit that you defined prior to acquiring the business.

What Should an Introductory ETA Training Program Include?

Succeeding in ETA requires a combination of hard and soft skills, along with support from a network of stakeholders. 

At VFC, we believe that an effective introductory ETA program should facilitate skill development and offer a supportive community for advice and problem-solving. However, nothing prepares you better than real-world experience with guidance from those who have walked the ETA path. 

An introductory ETA program should offer:

1. Help You Determine if ETA is Right for You
   ETA is a multi-year commitment that’s not suited for everyone. Acquiring a business requires a mix of professional experience, financial literacy, and a certain appetite for risk since not all acquisitions are financially successful. Additionally, the ETA journey may require a lifestyle change, such as relocating to where the business operates. Not everyone is ready or able to make such a move. An introductory course should clarify what the ETA process entails at each stage and help you assess how it aligns with your current lifestyle and goals.
2. Understand the Different Types of ETA and which One is Good for for you
   ETA isn’t a one-size-fits-all journey—there are different paths you can take depending on your goals, resources, and risk tolerance. Some people go the traditional route, raising funds from investors to acquire a business right away. Others might opt for a self-funded search, where they rely more on their own savings and borrow less, giving them greater control but also more financial pressure. Then there’s the incubator model, where you join a program that provides funding, mentorship, and resources in exchange for equity in the business you eventually acquire. Each path has its pros and cons, so it’s important to understand which type of ETA aligns best with your situation. An introductory ETA program should help you explore these options, weigh the risks and rewards, and determine the path that makes the most sense for you.

3. Gain the Essential skills to help you kick-off you ETA journey
   Conducting a successful search and due diligence demands a minimum level of skills, such as reading income statements, understanding cash flow, and distinguishing between key financial metrics like EBITDA and owner cash flow. An introductory ETA course should provide you with the opportunity to evaluate your current skills against what’s needed for the ETA journey. This assessment will help you decide if you’re ready to proceed or if you need more training to bridge any gaps, ensuring you have the credibility to engage with key stakeholders like investors and brokers.
4. Provide Exposure to the Ecosystem
   No one can successfully acquire a business alone. You’ll need to collaborate with brokers, accountants, lawyers, and investors, and work closely with the seller to establish a solid transition plan. Exposure to the ETA ecosystem is essential, and an introductory program should connect you with current searchers, successful acquirers, and other key players. As one investor advised, “Anyone embarking on the ETA journey should talk to 20 to 30 people in the ETA ecosystem before making the jump.” This network will be invaluable as you navigate challenges and opportunities along your ETA journey.

Introducing VFC’s ETA Training Program

At VFC, we’re leveraging our decade-long experience in entrepreneurial training to launch a cohort-based ETA program tailored to the Canadian context. Starting in March 2025, this rigorous yet flexible five-week program will bring together cohorts of 15 to 20 learners multiple times a year. 

We aim to offer a structured introduction to ETA for those exploring whether it’s the right path for them, helping participants assess their skills, mindset, and readiness. We believe there are many Canadians with the potential to pursue ETA, and this program aims to lower the barriers to entry, bridging the gap between curiosity and full commitment in the ETA journey.

If you want to learn more, sign up here for updates about our application process.