Did you know that 18.4% of the world’s adult population was either starting or running a new business in 2020? While many individuals are looking to start their own businesses, established companies and investors are also interested in buying innovative business ideas.
In fact, a survey Inc. Magazine found that 47% of entrepreneurs who sold their businesses did so to strategic buyers. So, who buys business ideas? Let’s find out.
Idea 1: Venture Capital Firms
Venture capital firms provide funding to start-ups and early-stage businesses in exchange for a share of ownership. They typically invest in businesses that have the potential for high growth and scalability.
According to the National Venture Capital Association, venture capital firms invested $164 billion in 2020, with the majority of that funding going to software and biotech companies.
Advantages of Venture Capital Firms
Venture capital firms not only provide funding but also offer valuable advice and mentorship to help startups grow. They have extensive networks of industry contacts and can help entrepreneurs with marketing, hiring, and scaling their businesses.
How to reach Venture Capital Firms?
You can reach venture capital firms through their websites, conferences, or personal referrals. It’s important to research the firms and their investment focus to make sure your business idea aligns with their portfolio.
Real-life examples of Venture Capital Firms
A famous example of a successful venture capital-backed business is Airbnb. In 2009, Airbnb received $600,000 in funding from Sequoia Capital, which helped the company grow into the global hospitality giant it is today.
Idea 2: Angel Investors
Angel investors are typically high-net-worth individuals who invest their own money in start-ups and early-stage businesses. They often have a keen interest in helping new businesses succeed and may provide not just funding but also valuable industry connections and mentorship.
According to the Angel Capital Association, there are over 300,000 active angel investors in the United States.
Advantages of Angel Investors
Angel investors are often willing to take more risks than traditional lenders, and they can provide not just funding but also mentorship and connections to help businesses succeed.
They are also more likely to invest in early-stage businesses that may not yet have a proven track record.
How to reach Angel Investors?
You can reach angel investors through networking events, online platforms like AngelList, or personal referrals. It’s important to have a compelling pitch and a solid business plan to attract their attention.
Real-life example of Angel Investors
Uber, one of the most successful startups in recent history, received funding from several angel investors in its early stages, including Chris Sacca and Naval Ravikant.
Idea 3: Private Equity Firms
Private equity firms are investment companies that provide funding to businesses in exchange for a stake in the company. They often invest in established businesses that have a proven track record of success. According to the Private Equity Growth Capital Council, private equity firms have over $4 trillion in assets under management.
Advantages of Private Equity Firms
Private equity firms can provide significant funding to businesses, and they often have expertise in a particular industry or market. They can help businesses grow through acquisitions, mergers, or operational improvements.
How to reach Private Equity Firms?
Private equity firms typically have strict investment criteria and may only be interested in established businesses with a proven track record. You can reach them through personal referrals, conferences, or working with a business broker.
Real-life examples of Private Equity Firms
Dunkin’ Donuts, the global coffee and donut chain, was acquired private equity firm Bain Capital in 2006. Bain Capital helped Dunkin’ Donuts expand its product offerings and improve its operational efficiency.
Idea 4: Strategic Buyers
Strategic buyers are established companies that are interested in acquiring new ventures in order to expand their business offerings. They may be interested in buying a business idea that aligns with their strategic goals or that can help them enter a new market.
According to a survey Deloitte, 81% of companies plan to increase their mergers and acquisitions activity in the next 12 months.
Advantages of Strategic Buyers
Strategic buyers can provide not just funding but also access to new markets, customers, and distribution channels. They can help businesses grow more quickly and efficiently than if they were operating on their own.
How to reach Strategic Buyers?
You can reach strategic buyers through personal referrals, networking events, or working with a business broker. It’s important to research the potential buyer and understand their strategic goals and objectives.
A real-life example of Strategic Buyers
Facebook’s acquisition of Instagram in 2012 is a well-known example of a strategic buyer acquiring a promising startup. Facebook was able to leverage Instagram’s popularity and expertise in mobile photography to enhance its own offerings.
Idea 5: Business Incubators
Business incubators are organizations that provide resources and support to early-stage businesses. They may offer funding, office space, mentorship, and networking opportunities to entrepreneurs.
Some business incubators may also be interested in buying promising business ideas and helping to develop them into successful businesses. According to the National Business Incubation Association, there are over 7,000 business incubators worldwide.
Advantages Business Incubators
Business incubators provide a range of resources and support to early-stage businesses, including funding, office space, mentorship, and networking opportunities. They can help entrepreneurs turn their ideas into viable businesses.
How to reach Business Incubators?
You can reach business incubators through their websites or attending networking events. It’s important to have a well-developed business idea and a solid business plan to be considered for incubation.
A real-life example of Business Incubator
Dropbox, the popular cloud storage and file-sharing platform, was incubated at Y Combinator, one of the most well-known business incubators in the world.
Idea 6: Innovation Labs
Innovation labs are research and development units within larger companies that focus on developing new products or technologies. They are always on the lookout for innovative business ideas that could potentially lead to new products or services.
Innovation labs may be interested in buying business ideas that align with their research focus or that have the potential to generate new revenue streams.
Advantages of Innovation Labs
Innovation labs are always looking for new business ideas that can lead to new products or technologies. They can provide funding, mentorship, and resources to help businesses develop their ideas and bring them to market.
How to reach Innovation Labs?
You can reach innovation labs through their websites or attending innovation-focused events. It’s important to have a well-developed business idea and a clear understanding of the lab’s research focus and objectives.
Real-life example of Innovation Labs
The Google X lab, which was responsible for developing products like Google Glass and self-driving cars, is an example of an innovation lab that invests in cutting-edge technologies.
Idea 7 : Business Brokers
Business brokers are professionals who help business owners buy and sell businesses. They may be able to connect you with potential buyers for your business idea.
Business brokers typically charge a commission based on the sale price of the business, so it’s important to understand their fees and services before working with them.
Advantages of Business Brokers
Business brokers can help connect entrepreneurs with potential buyers or investors, provide advice on business valuations, and facilitate negotiations.
How to reach Business Brokers?
You can reach out to business brokers through online directories or attending industry events. It’s important to have a well-developed business plan and financial projections to demonstrate the potential of your business idea.
A real-life example of Business Brokers
When Dollar Shave Club was acquired Unilever for $1 billion in 2016, it was reported that the founders used a business broker to help facilitate the deal.
Idea 8 : Crowd Funding Platforms
Crowdfunding platforms are websites that allow entrepreneurs to pitch their business ideas to a large audience of potential investors. If your business idea is well-received, you may be able to secure funding from a group of interested investors.
Crowdfunding platforms typically charge a fee for their services, so it’s important to understand their terms and conditions before launching a crowdfunding campaign.
Advantages of Crowd Funding Platforms
Crowdfunding platforms provide a way for businesses to raise money from a large pool of individual investors. They can also help businesses generate buzz and attract early adopters.
How to Reach Crowd Funding Platforms
You can reach crowdfunding platforms like Kickstarter or Indiegogo through their websites. It’s important to have a compelling pitch and a prototype or mockup of your product to attract backers.
Oculus Rift, the virtual reality headset, was initially funded through a Kickstarter campaign in 201
Idea 9: Online Marketplaces
Online marketplaces like Flippa and BizBuySell allow entrepreneurs to buy and sell businesses and business ideas online. You can list your business idea on these marketplaces and connect with potential buyers.
Online marketplaces typically charge a fee for their services, so it’s important to understand their fees and policies before listing your business idea.
Advantages of Online Marketplaces
Online marketplaces provide a platform for entrepreneurs to sell their products or services to a large customer base. They can also provide tools for marketing, logistics, and payment processing.
How to reach them?
You can sign up for online marketplaces like Amazon, Etsy, or Alibaba through their websites. It’s important to have a well-defined product or service and a clear understanding of the marketplace’s rules and fees.
ThirdLove, a startup that sells lingerie online, was able to grow its business listing its products on Amazon.
Idea 10: Strategic Partnerships
Partnering with another business that has similar goals or target customers can be an excellent way to bring your business idea to life. By collaborating with a strategic partner, you can combine your expertise and resources to create a stronger, more successful venture.
Strategic partnerships can also provide access to new markets or distribution channels. Look for businesses that share your vision and values, and explore ways to work together to bring your business idea to fruition.
Strategic partnerships can provide access to new markets or distribution channels and help businesses combine their expertise and resources to create a stronger, more successful venture.
How to reach them:
Look for businesses that share your vision and values, and explore ways to work together to bring your business idea to fruition.
The partnership between Nike and Apple to create the Nike+iPod product line is an example of a successful strategic partnership between two industry giants.
In conclusion, there are a variety of potential buyers for business ideas, ranging from investors and accelerators to corporations and strategic partners.
Each of these buyers has its own advantages and methods for reaching them, so it’s important for entrepreneurs to carefully consider their options and develop a strong business plan to showcase the potential of their idea.
With the right approach, entrepreneurs can successfully bring their business ideas to market and achieve their goals.