This report, Social Entrepreneurship through Acquisition (sETA): A Guide for Impact Investors to the Growing ETA Market, offers a primer on the Entrepreneurship through Acquisition (ETA) landscape and raises critical questions for investors seeking to engage with this fast-growing market through an impact lens.
In ETA, individuals or small teams acquire and operate established businesses, often with backing from investors. Once a niche model, ETA has grown rapidly from only 14 funds in 1996 to more than 700 worldwide today. The model seems appealing: it can deliver strong returns for investors while keeping vital local businesses alive as retiring owners step away. But ETA wasn’t built with impact in mind. Too often, it remains accessible only to insiders, can push entrepreneurs to prioritize financial returns over long-term value, and introduce risks to workers, customers, and communities.
Social ETA (sETA) is an emerging field reimagining ETA through a transformative lens, aligning this approach with impact goals across four dimensions: 1) expanding access for more diverse entrepreneurs, 2) growing employee ownership, 3) embedding better operational practices, and 4) anchoring businesses in their communities.
This report introduces a new lens for evaluating impact in ETA transactions. It offers insights into the market, the promise and pitfalls of ETA, and how its evolution might be shaped toward lasting social impact. It also presents a draft sETA Impact Scorecard as a starting point for collective refinement.
sETA is a complementary approach to employee ownership transitions, in particular when business owners can't or won't sell their business to its employees. Learn more about employee ownership and other alternative ownership models on our AOE Learning Hub.
