Busting the most ommon myths on repreneurship
Business acquisition is not a smooth academic journey with a nice growth curve at the end. It’s an endurance sport, filled with doubts, tough negotiations, and surprises — both good and bad.
At Re-New, we often see buyers trapped by common misconceptions. Here are 10 widespread myths — and real-life examples to debunk them.
Yes, 185,000 businesses are considered “transferable” each year in France, but only 51,000 transactions are actually closed. The challenge is not quantity, but fit: financial health, size, location, and compatibility with the buyer’s project.
Example: A manager in Lyon wants to buy an industrial SME with €5M turnover. He identifies 50 potential targets… but only 2 are realistic. The others are too indebted, too far away, or lack clear potential.
Banks typically require around 30% equity contribution. Without it, a project lacks credibility.
Example: A buyer with €50k in equity for a €2M target will struggle to attract investors. With €600k equity, he can easily raise a bank-led LBO.
Valuation is a starting point, not a truth. EBITDA can be misleading.
Example: A CEO pays himself a low salary but high dividends. The inflated EBITDA values the company at €6M. After adjusting for a market salary, the true value drops to €5M.
The Letter of Intent sets a framework and exclusivity, but it is not the final sale agreement.
Example: A buyer signs an LOI for an IT company, then discovers during due diligence that 40% of revenue depends on a single client. He can still walk away.
No. It also covers HR, legal, tax, operations, and environmental aspects.
Example: A buyer acquires an industrial firm that owns its premises. Without a building audit, he misses a €200k roof renovation. A nasty hit to cash flow.
Signing is just the beginning. The first 100 days are critical.
Example: A buyer fails to meet key clients right away. Three switch to competitors, and revenue drops by 20%.
The collective reduces risk: accountants, lawyers, peer buyers, banking networks.
Example: A buyer negotiates a vendor loan alone but forgets early repayment terms. Result: a legal dispute with the seller.
They are alignment tools between seller and buyer.
Example: An earn-out tied to future revenue keeps the seller engaged, while the buyer pays based on real performance.
Expect 12–18 months on average, sometimes 24.
Example: Negotiations starting in January 2023 close in June 2024, after 2 audits and 3 banks approached.
Even without CSRD obligations, SMEs face pressure from large clients.
Example: An automotive subcontractor must show its carbon footprint to stay on the supplier list. Without it, the main contract is at risk.
A successful acquisition isn’t just about multiples or financial structuring. It requires clear-sightedness, networks, preparation… and above all, the ability to challenge misconceptions.
At Re-New, we help buyers to:
Here are the main stages of a buyer’s journey, simplified as a roadmap:
