Generation Z as Buyers: What Young Entrepreneurs Look for in Acquisitions

Welcome back to another edition of The Wise Exit!

In today's issue, we're covering:

1. Generation Z as Buyers: What Young Entrepreneurs Look for in Acquisitions

2. What is SDE in Business? - All Questions Answered

3. Cash vs. Earnout: The One Massive Decision You Can't Get Wrong

4. Deal of the Week: High-Margin Mental Health Practice

Let's dive in!

Generation Z as Buyers: What Young Entrepreneurs Look for in Acquisitions

There's a new type of buyer in town - Gen Z entrepreneurs.

These twenty-something buyers have different priorities than the acquirers you might be used to. Having worked with buyers across multiple generations, I've noticed three things Gen Z looks for:

1. They Want Digital-First Operations

Gen Z buyers expect more than just a website and social media. They want cloud systems, automation, and integrated tech. Companies still running on spreadsheets and paper will struggle to attract these buyers.

2. They Pay More For Purpose

Gen Z entrepreneurs buy businesses that align with their values. Companies with authentic social impact or environmental benefits often command higher prices from these buyers. But be warned - they can spot fake "purpose washing" from a mile away.

3. They Demand Flexible Work Models

Businesses built around mandatory in-office work face tough questions from Gen Z buyers. They've grown up with remote work and want companies that can thrive with distributed teams.

Want to attract these younger buyers? Start thinking about how your business looks through their eyes.

The right Gen Z entrepreneur might see potential in your company that traditional buyers miss completely – and pay you a premium for it.

Featured Blog 📰

What is SDE in Business?

If you're a small business owner preparing for an exit, understanding Seller's Discretionary Earnings (SDE) is absolutely critical to maximizing your sale price.

Our latest blog breaks down everything you need to know about this important financial metric that measures the total economic benefit you receive from your business each year.

We cover:

• The complete definition of SDE and why it matters for your business valuation

• How SDE differs from other financial metrics

• A step-by-step guide to calculating your own SDE

• How buyers use SDE to determine what your business is worth

Check out "What is SDE in Business? - All Questions Answered" on our blog to understand how this metric could impact your exit strategy.

M&A Tips from Brian Dukes 💡

When selling your business, you'll face many important decisions.

But there's one massive decision you don't want to make wrong:

All-cash offer or earnout?

Sellers want cash upfront. But buyers want to structure payments over time.

That's where things can get tricky.

So here's the advice I always give to the founders we work with:

Cash is the ONLY thing that's guaranteed. Because an earnout might promise you millions in future payouts.

But anything can happen along the road to a sale (just look at what COVID did to businesses overnight).

Earnouts are always going to be higher risk. So if you're considering one, here are 3 ways to protect yourself.

Read the full post on LinkedIn.

That's all for this week!

Remember, understanding who might buy your business tomorrow should influence how you build it today.

Whether it's meeting the expectations of younger entrepreneurs or securing the right deal structure — preparation is everything.

Best,

Brian Dukes