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Fundamentals

Financial Buyer

A financial buyer is an investor, such as a private equity firm, that buys a company mainly to grow its value and sell it later.

A financial buyer invests for a return. It is not an operating competitor. Private equity firms are the best known financial buyers. They buy a company, help it grow and sell it later.

For example, a private equity firm buys a services company. It adds a sales leader, upgrades software and buys two small competitors. The company stays independent and keeps its brand.

For owners, a financial buyer often means your team stays, your brand stays and you may keep a stake through rollover equity. Financial buyers also bring capital and management help.

The trade-off is that they plan a later sale, so growth targets and reporting can be tighter. Read both sides in private equity vs strategic buyer. Related terms are strategic buyer and private equity.

Read nextPrivate equity vs strategic buyer: which one should buy your business?

Related terms

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