Strategic vs Financial: A Side-by-Side Comparison

Leaders of founder-owned businesses likely know that the buyer universe essentially breaks down into two main categories—strategic buyers, who focus on synergies and operational integration, and financial sponsors, who emphasize cash flow generation and growth potential in the underlying market. For any founder-owner looking for an optimal outcome in a liquidity event, it’s a good idea to know your audience and its motives. In this short primer and comparison view, six primary differences between strategic buyers and financial sponsors are outlined for consideration, including valuation potential and management expectations.