Management Buy-In (MBI)
When an outside executive (or team) buys the business and steps in to run it — common with search funders and turnaround buyers.
A Management Buy-In (MBI) is a transaction where an outside management team — typically one or two executives, often backed by outside investors — purchases the business and steps in to run it. The structure looks similar to an MBO from the seller's side (someone is buying and running the business), but the buyer is unfamiliar with the business at the start, which means longer diligence, more transition support required from the seller, and more execution risk for everyone involved. Search fund buyers are essentially running an MBI structure. Some independent sponsors do MBIs as well. Occasionally an experienced industry executive will buy a business as a sole MBI buyer, often with bank or SBA financing.
MBIs are common for retiring owners without an internal management team — but the outside buyer needs more transition support, more documentation, and a longer handover than any other buyer type.
The MBI buyer is taking the biggest leap of any acquirer — they're committing to running a business they don't yet know.
Find out what a buyer would see in your business — before you talk to one.
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