Pat East on the new buzz over buying businesses—and potential red flags

We’ve developed a romantic ideal of entrepreneurism in recent decades closely connected to startup culture and the brave souls who want to create something that can disrupt a product type or even a whole industry. But for a variety of reasons, a growing number of aspiring entrepreneurs of all ages are choosing to become business owners by acquiring a company rather than starting one from scratch. Among the benefits: Folks who acquire companies are working with products or services that already are proven in the marketplace. They can immediately start paying themselves from existing sales. And getting financing can be easier when your business has an established track record. Our guest this week on the IBJ Podcast is a great example of the surging interest in ETA—shorthand for entrepreneurship through acquisition. Pat East and his wife founded a digital marketing company from scratch in the early 2000s and turned it into a behemoth with 75 employees and $10 million in annual sales. They sold it in 2020, which allowed East to focus more on his other role as executive director at The Mill, a nonprofit Bloomington co-working space and entrepreneurship center. He recently stepped down from The Mill in hopes of getting back into business for himself, and he discovered that Indiana doesn’t have a very robust community for aspiring entrepreneurs interested in ETAs. So he’s hosting meetups across the state to help fill that gap while he searches for his opportunity. In this week’s podcast, East discusses his exit from Hanapin Marketing, provides tips for those considering ETAs and breaks down the warning signs entrepreneurs should beware.