Business succession is a unique and often emotional process — making it all the more important to find the right solution.

But which succession option is right for your company, your values and your goals? Should it be a management buy-in or buy-out? A strategic buyer? A search fund? Or is it a traditional financial investor?

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In this article, we compare the four most relevant options and show which type of entrepreneur they are particularly suitable for.

1. MBO — Management Buy-Out: Succession from the company

At MBO, the existing management — e.g. long-standing managers or authorized signatories — takes over the company. Financing is usually provided by external capital, equity and, if applicable, investors.

✅ advantages:

• Knowledge of internal processes and culture
• Low integration risk
• High acceptance among employees and customers

❌ Disadvantages:

• Limited funding capacity of management
• Operational blindness possible
• Personal-emotional conflicts during negotiations

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2. MBI — Management buy-in: External takes over with entrepreneurial spirit

An experienced external person buys into the company — often with the aim of actively developing it further. An MBI is often accompanied by a financial partner (e.g. banks or private equity funds).

✅ advantages:

• New ideas and a fresh look
• Clear entrepreneurial motivation
• Opportunity for targeted development

❌ Disadvantages:

• Cultural fit not guaranteed
• Trust must be built
• More complex training and handover

3. Strategic buyer: Intern takes over

Strategists are companies that integrate the target company into their existing structure — often competitors, suppliers or customers.

✅ advantages:

• High synergies possible (sales, production, IT, etc.)
• Quick deal process through experience
• Potentially high purchase price due to strategic fit

❌ Disadvantages:

• Risk of site closures or relocations
• loss of independence
• Employee turnover due to significant change

4. Financial investor: holding company takes over

Private equity investors are joining with the aim of further developing the company and selling it on after a few years. Founders often remain involved for the time being (“re-invest”).

✅ advantages:

• High purchasing power & experience in M&A
• Entrepreneur can remain active for a few more years
• Access to network, know-how and growth financing

❌ Disadvantages:

• Focus on return & exit strategy
• Short to medium-term time horizon
• Potentially high reporting requirements & control mechanisms

5. Search Fund: Entrepreneur searches specifically for companies

A search fund is an entrepreneurial approach in which a (young) entrepreneur with investor capital specifically searches for a company to take over. The seeker then takes over operational management.

✅ advantages:

• Committed, long-term successor
• Personal connection to the entrepreneur is possible
• Often flexible handover and participation models

❌ Disadvantages:

• The searcher's experience varies
• Financing only secured after confirmation
• Longer lead time (search phase to deal)

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Conclusion: Succession is individual — but can be planned

The right succession solution depends not only on your company, but also on your personal goals. The following are important:

• Your role after handover (active, passive or complete exit)
• The values that you want to live on
• The economic and emotional framework

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Check successor option now

Are you facing a succession decision? We'll help you find the right route — with a clear view of your goals, your business, and your options.

Book a free orientation meeting

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