The coming wave of small business succession and the role of stakeholder synergy theory

Retiring business owners are expected to sell or bequeath $10T worth of assets over the next twenty years. Small businesses will drive this coming wave of succession. While stakeholder theory has generally been rejected in finance because it creates a lack of accountability for managers, it may be that entrepreneurs derive utility from positive outcomes for other stakeholders. We extend stakeholder synergy theory to the case of business succession and generate recommendations for selling business owners based on what they value. Our theoretical extension has implications for owners selling a business, their communities and employees, and private equity firms. We provide a case study to exemplify the issues faced by exiting business owners selling to nonfamily.