Two decades of hard-won lessons on buying well, operating wisely, and letting AI reshape the businesses searchers are acquiring today

I graduated from Chicago Booth in 1999, at a moment when "entrepreneurship" was mostly a synonym for venture-backed technology startups. The idea that buying a profitable, established business — a staffing firm, a specialty manufacturer, a regional services company — could be just as entrepreneurial, just as intellectually demanding, and just as wealth-creating as building from zero? That was a minority view.

Today, the Polsky Center's Entrepreneurship Through Acquisition program is producing a generation of searchers, operators, and investors who understand the full spectrum. I was proud to join Brian O'Connor on the ETA Insider podcast to share what two decades of living inside this asset class have taught me — as an operator from 2004, as an investor from 2010, and now as a venture-focused GP at Aavaran Capital who still believes, deeply, that the principles underlying great ETA are universal.

ETA is not a strategy. It is a disposition. Before a searcher ever opens a CIM or builds a diligence checklist, they have to reckon with who they are and why they are doing this. The students I admire most — from Booth ETA cohorts and from the broader global community — share five qualities I watch for whether I am evaluating a first-time searcher or a late-stage venture founder.

I have made expensive mistakes. The most costly had nothing to do with financial modeling or market sizing — they had to do with seller integrity. When I look back at deals that went sideways, the warning signs were almost always present before close. We rationalized them. We told ourselves the price justified the risk, or that our operational competence would paper over the cracks. It rarely does.

In a leveraged acquisition, you do not get partial credit. You either hold a sustainable business or you are fighting for survival. The practical implication for searchers: integrity diligence is not a background check. It is a structured process. Talk to former employees, not just current ones. Talk to customers who left, not just the reference list the seller provides. And surround yourself with what I call river guides.

A river guide is someone who has navigated these waters before — in this industry, in this geography, with this type of seller. Their pattern recognition is worth more than any financial model you will build. Build your network of river guides early, before you need them, and compensate them generously for their time.

My most instructive failure as an operator came after the close. The business was real, the seller was honest, the financials were clean. What I underestimated — catastrophically — was the culture I was walking into and the degree to which my presence would be experienced as a threat by the people who had built it.

Post-acquisition culture clash is the most under-discussed risk in ETA. The operators I have watched navigate this well share a common instinct: they listen before they lead. They invest the first ninety days in understanding — not changing. They identify the informal power structures, the institutional knowledge that lives in people rather than systems, and the unspoken norms that govern how decisions actually get made. Then they earn the right to change things.

Layering is adding a chatbot to your customer service workflow. Layering is using AI to draft marketing copy faster. These are efficiency gains — real, but incremental. Transformation is rethinking the organizational model itself. It is asking: if I were designing this business from scratch today, knowing what AI can do, what would the org chart look like? What new revenue streams become possible when my team is freed from the work that AI now handles?

This is the question I am asking about every business I evaluate at Aavaran Capital, whether it is a venture-scale disruptor or an established SME. The frame is the same. The urgency is the same. AI does not care whether your business was founded in 1985 or 2020.

Booth built its ETA program on a powerful insight: entrepreneurship is a career track, not a lottery ticket. You do not have to wait for the perfect idea. You can buy your way into ownership of a real, cash-flowing, community-embedded business — and build something extraordinary from there.

That insight is now resonating globally. The ETA community spans continents, and the principles — capital efficiency, operator alignment, patient value creation — are universal. I am grateful to the Polsky Center and to Brian O'Connor for continuing to invest in this community through the ETA Insider podcast.

The episode is live. I hope it is useful. And if you are in the middle of a search, or contemplating one, or advising someone who is — I am always happy to talk.