Family Business: An alternative solution to the succession issue
Of — Seasoned Businesses The Owners Forsyth Of Acquisition' Can 'entrepreneurship Connecting Business Rob Value See Capital Says Established Talent Through With Elevate
Demographic shifts are reshaping the landscape for family businesses, with a growing number of owners nearing retirement without a clear successor.
In Germany alone, over 31% of SME owners are now over 60 years old, with similar trends occurring in Ireland. Recognising this challenge and striving to be part of the solution, Rob Forsyth launched Elevate Capital in early 2024.
His vision? To acquire a high-potential Irish SME and ensure a seamless transition for the retiring owner while laying a foundation for future growth.
“This approach is known as 'Entrepreneurship Through Acquisition' (ETA) whereby an individual backed by a small group of external investors acquires an established SME/family business. Following acquisition, the individual takes on the lead role of 'owner operator',” said Rob.
“The concept first originated at Stanford Business School in the 1980s and is now a common-place solution to owner succession in both the mainland Europe and the US — where it is taught as part of MBA programs. Despite the popularity further afield, it is still in its infancy and relatively unknown in the UK and Ireland.”
Having grown up around the family business, a flooring distribution SME, Rob learned at an early age — usually around the dinner table — both the opportunities and challenges inherent in running an owner managed business, but ultimately the over-riding fulfilment that can be found in both creating employment and satisfying a customer need state.
Having started his career as an accountant with KPMG, Rob has spent the last 15 years working in a variety of roles across strategy, finance and operations in large multinational organisations.
Understanding the changing demographic trends and recognising the gap in the market, he saw a significant opportunity to marry this corporate experience with the right Irish SME through making a full/partial acquisition, which has in turn led to the inception of Elevate Capital.
“Not all family businesses have a son or daughter who wants to take over the family business or is indeed equipped for that role, naturally this can create complexities for business owners when it comes to succession planning.
“Where this challenge exists, the alternatives usually include a sale to a competitor, sale to private equity — where the business is of a significant size — and in the worst-case scenario, closing the doors entirely.
“These options are not always preferable to the retiring owner, which is where ETA and Elevate Capital, can play a unique role in offering a more favourable alternative to the seller.”
Beyond individual transactions, Rob believes in the broader societal impact of ETA: “We know that FDI is a central pillar to the Irish economy, but a thriving SME sector is crucial for Ireland's future economic success.
“By connecting seasoned talent with established businesses, ETA doesn't just facilitate transactions — but instead fosters a stronger and more independent Irish economy.”
In addition to the macro-economic benefit, the success of ETA is evident in its returns. Stanford Business School data suggests an average investor return rate (IRR) of 35%, outperforming public market returns by a significant margin.