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Why Buying an Existing Business is the New Way to Build Wealth
In recent years, an increasing number of entrepreneurs are opting to raise money to buy businesses instead of starting new ones from scratch. This trend is being driven by a range of factors, including the rising cost of starting a business, the availability of attractive acquisition targets, and the potential for faster growth and higher returns.
One of the key advantages of buying an existing business is that it allows entrepreneurs to leverage the work of others and build on the successes they have already achieved. For example, Elon Musk was able to turn around and grow the struggling electric car company Tesla by investing $6.5 million in the company in 2004 and developing it into a nearly trillion-dollar market cap company. Similarly, Bernard Arnault was able to turn the luxury goods company LVMH into a global powerhouse by acquiring and integrating a range of established brands.
Another advantage of buying an existing business is that it can be a faster and more cost-effective way to achieve scale and reach new markets. By acquiring an established company, entrepreneurs can gain access to new customers, suppliers, and distribution channels, as well as valuable intellectual property and other assets. This can help them to grow their business more quickly and generate higher returns for their investors.
