Three-quarters of Canadian small- and medium-sized businesses plan to exit within the next decade. However, according to John Mackay, only 10% actually have a formal succession strategy in place.
For many owners, the sale of their business represents the culmination of decades of work and serves as their primary retirement strategy. The absence of clear transition plans leaves a growing pool of businesses in need of new leadership, creating an emerging opportunity for buyers prepared to step in.
Mackay, founder and former executive chairman of Mosaic Capital, shared these insights while moderating a ScaleUP Week session in the boardroom of McLeod Law LLP. While the broader innovation ecosystem often focuses on startup founders, this discussion offered an alternative view of entrepreneurship — one centred not on invention, but transition.
Entrepreneurship through acquisition (ETA) refers to buying an existing company and stepping in as its next owner. You don’t become a founder by doing this (even if Elon Musk famously styled himself as one at Tesla), but you do become the person responsible for leading and growing the business.
Around the table, three panellists shared their experiences with ETA, covering everything from failed startups and first-time deals to building portfolios of cash-flowing businesses through creative structuring and strong partnerships.
Buying your way in
For some entrepreneurs, ETA is a deliberate path. For others, it’s something they stumble into. These shifts can come after failure, after law school, or even after a family plan has gone sideways.
Marc Nzojibwami, merger and acquisition advisor at SMB Deal Hunter, said he always knew he wanted to be an entrepreneur. Still, after launching two businesses during university and watching both fail, he felt stuck.
“I wasn’t very good,” he told the group. Later, through a family friend, he discovered ETA and eventually acquired a Calgary print and signage business called ABL Imaging with two partners.
“We went in, we acquired that business, and it’s been a great experience,” Nzojibwami said. “The business is doing what we thought it would do, which is more than you can ever ask for.”
Steve Spackman, a former lawyer, said he unknowingly followed an ETA path long before he knew the acronym. Since 2014, he has acquired 10 companies and currently retains ownership in four. His main business, Real Seal Contracting, specializes in building envelope repairs.
“I don’t practice law at all,” he said. “In fact, I gave up my licence a few years ago.”
He believes the best acquisitions are often the least flashy.
“Joe’s Porta Potty pumping business is the best business to buy,” said Spackman. “Because nobody wants to pump porta potties, but guess what? People are making a fortune doing it.”
ETA came through a different door for Liz McCrea. When a family business succession plan fell through, she and her husband shifted course and bought a franchise and eventually turned ETA into a full-time pursuit.
She’s now co-founder of Village Wealth, a platform that helps new buyers find, analyze, and finance acquisition targets. Many of the companies she works with are not publicly listed, and she says the ecosystem remains fragmented.
“There’s a disparity in knowledge across the board,” McCrea said. “Buyers are really struggling with where to go and how to navigate the ecosystem, how to find good companies for sale, how to finance them.”
Advice for buying, not building
The panel outlined a typical financing structure: a blend of bank debt, personal equity, and seller financing.
In Canada, banks will generally lend between 65% and 75% of a company’s purchase price. The remaining amount is often filled through personal equity and what’s known as a vendor take-back (VTB) loan, which is also referred to as seller financing.
In this arrangement, the seller agrees to receive part of the payment over time, rather than upfront. This not only reduces the buyer’s need for capital on day one, but it also keeps the seller financially invested in the business’s continued success.
“If you give the seller all of the money, day one,” Spakman explained. “[It’s] adios, see you later, they don’t need to support you.”
However, he added, when the seller has money tied up in the deal, it gives the buyer leverage if any misrepresentations surface after the acquisition is complete.
Not all deals require a large upfront capital investment, though the panel emphasized that buyers should be prepared to contribute something meaningful to the deal.
“Yes, it does require money to buy a business,” said Nzojibwami.
But in some cases, he noted, a seller note (also known as vendor financing) can cover a substantial portion of the price. If the business has strong fundamentals and the bank is confident in the deal, the buyer may be asked to put in only a small amount of personal capital.
Still, banks typically want to see some form of “good faith money” to show the buyer is serious and has skin in the game, Nzojibwami added.
McCrea made a similar point, noting that sellers also take on risk in these arrangements.
“If they’re not operating that company anymore, and you’re operating that company, and you’ve never run their business before, their money’s at risk,” she said. “And so it’s a risk-reward.”
Both stressed that while creative financing is possible, it requires trust, structure, and a compelling case for why a seller or a lender should bet on the buyer.
Here are a few practical insights the panel shared for anyone exploring ETA:
- Start by identifying key sectors. Where do you have knowledge, interest, or relationships?
- Look for off-market deals. Cold outreach to business owners can lead to deals that haven’t hit the market.
- Ask direct questions. Spackman said he often pitches small business owners casually, asking “What’s your succession plan?” or “What would you do with more free time?”
- Watch out for financial red flags. Spackman warned about inflated earnings that don’t reflect the owner’s unpaid labour, saying “financials not being normalized” is a common issue.
- Assemble a deal team. Having a good accountant and having a good lawyer is “a must when you’re going through a deal,” Nzojibwami said.
- Know the trade-offs. Taking over an existing business comes with complexity and risk. “You’re the IT department, you’re the HR department, you’re the accounting department or the sales department,” said Nzojibwami. “You’re the head of every department.”
It’s still entrepreneurship — just not from zero
None of this is to say that the ETA route is inherently easy.
The panellists were clear in saying that buying a business isn’t a shortcut to passive income. Owners take on real operational responsibility and often start in the trenches.
“Running a small business is messy. It’s not glamorous,” said Nzojibwami. “So when the internet is down, you don’t call the IT department. You are the IT.”
He cautioned against the idea that new owners can simply sit back and collect cash flow. While many buyers aspire to own absentee-run businesses, that’s not how most acquisitions begin.
“That doesn’t exist,” said Nzojibwami. “It can become that. You can get it to that.”
“You don’t buy an absentee business from day one,” agreed Spakman.
In his view, the most attractive businesses, the ones with stable operations and limited owner involvement, are rarely publicly listed.
“Those businesses don’t go for sale,” Spakman continued. “Because the good ones get snatched up before they ever go to market.”
Spackman added that while his goal is to build a company that can run without him, that takes time, intention, and the right leadership.
“That’s the goal, right?” he said. “I’m not there yet, so I’m still in my business every single day.”
Together, the panel reframed ETA not as a passive investment strategy, but as an active and often hands-on path to ownership, and one that trades the uncertainty of starting from zero for the challenge of scaling something that already works.
Still, the model offers distinct advantages over starting from scratch.
In an acquisition, product-market fit is already proven, customers are already calling, and payroll is already being met. With tens of thousands of Canadian business owners planning to exit in the coming decade — many without a successor — the market is full of opportunity.
As Mackay noted in his opening, it’s their retirement. But it could be your next move.
Digital Journal is the official media partner of ScaleUP Week 2025.
This coverage is supported by the Calgary Innovation Coalition (CIC), a network of 95+ organizations working to accelerate innovation and entrepreneurship across the Calgary region.
This article was created with the assistance of AI. Learn more about our AI ethics policy here.
