Demographic changes are reshaping the family business landscape, with more business owners approaching retirement without a clear successor.
In Germany alone, more than 31% of SME owners are over 60 years old, and a similar trend is seen in Ireland. Recognizing this challenge and striving to be part of the solution, Rob Forsyth launched Elevate Capital in early 2024.
His vision? Acquisition of a high potential Irish SME, ensuring a seamless transition for the retiring owner while laying the foundations for future growth.
“This approach is called Entrepreneurship by Acquisition (ETA), where an individual backed by a small group of external investors acquires an established SME/family business. After the acquisition, the individual takes on the lead as an ‘owner-operator’ character,” Rob said.
“The concept originally originated at Stanford Business School in the 1980s and has now become a common solution inherited by owners in continental Europe and the United States, taught as part of MBA courses. Although popular further afield, It’s still in its infancy and relatively unknown in the UK and Ireland.”
Having grown up in the family business, a flooring distribution SME, Rob learned at an early age (often over the dinner table) the opportunities and challenges inherent in running an owner-managed business, but ultimately found the most important The sense of accomplishment is in creating jobs and meeting customer needs.
Rob began his career at KPMG and has spent the past 15 years in a variety of strategy, finance and operations roles with large multinational organizations.
Understanding changing demographic trends and recognizing gaps in the market, he saw significant opportunities to combine this corporate experience with suitable Irish SMEs through full/part acquisitions, which in turn led to the formation of Elevate Capital.
“Not all family businesses have a son or daughter who wants to take over the family business, or is actually capable of taking on the role, which naturally creates complications for the business owner’s succession planning.
“If such challenges exist, alternatives often include selling to a competitor, selling to a private equity firm (if the business is large), or, in the worst-case scenario, closing the doors entirely.
“These options are not always better for retired homeowners, and ETA and Elevate Capital can play a unique role in providing sellers with more favorable options.”
Beyond personal transactions, Rob believes ETA will have a wider social impact: “We know that foreign direct investment is a core pillar of the Irish economy, but a thriving SME sector is vital to Ireland’s future economic success.
“By connecting experienced talent with established businesses, ETA not only facilitates transactions but also fosters a stronger, more independent Irish economy.”
In addition to macroeconomic benefits, ETA’s success is also reflected in returns. According to data from the Stanford Business School, the average investor return rate (IRR) is 35%, which is significantly higher than public market returns.
www.elevatecapital.ie
