If you are selling a business, you want to maximise company value. This can be challenging at a time when the Baltic economies are experiencing profound changes due to factors such as climate change; energy transition; de-globalization; and the rise of Artificial Intelligence.
At Baltic Family Capital, we believe that in addition to these factors one crucial issue cannot be overlooked: the looming succession gap among Baltic entrepreneurs. If unresolved, this issue could significantly slow economic growth across the region. Small and medium-sized enterprises (employing between 10 and 250 people) are the backbone of our economy. The average owner of such a company is 55 years old. Most belong to Latvia’s first generation of entrepreneurs, many of whom are preparing to retire within the next 5-10 years. Unfortunately their children often show little interest in taking over the family business.
For these founders, the idea of selling their life’s work can feel daunting. Finding the right buyer, navigating complex negotiations, and dedicating huge amounts of time, often at the expense of stepping back from day-to-day operations.
The “Forever Investor”: a solution for Baltic business succession
Selling a company does not have to be intimidating. One of the less known, but increasingly attractive paths is partnering with a so-called “forever investor”.
The forever investor strategy focuses on acquiring strong, high-quality businesses and growing their value over the long term. This is the objective of Baltic Family Capital, which was founded in 2024. By 2030, we aim to own between 10 and 20 companies across the manufacturing, distribution, and business services industries, with combined revenues surpassing €100 million. Each business will have EBITDA ranging from €500,000 to €5 million. Our guarantee: to never re-sell our portfolio companies.
The concept of forever investing is not new. It originated in the US and Sweden, pioneered by firms like Berkshire Hathaway and LIFCO. A quarter of a century ago, LIFCO was a young Swedish holding company buying small manufacturers with profits around €5 million. Today, thanks to the power of compounding, its profits exceed €500 million. In 2014, LIFCO went public, and since then, its share price has multiplied nearly 18-fold.
Maximizing value: the key to a successful business sale
The team at Baltic Family Capital has extensive experience in buying and selling businesses. Maximising company value comes down to a three-step approach:
1. Define the scope of the deal. Ensure that the legal entity you’re selling includes all operating contracts and assets. If you want to keep real estate, separate it into another company. Disclose any personal or disproportionate transactions. The number one reason deals collapse during due diligence is lack of trust. Full and timely transparency minimizes that risk.
2. Don’t waste resources on meaningless valuations. Each year, Baltic entrepreneurs spend millions on costly “independent valuations” by consultancies and auditors - assessments that rarely reflect how buyers actually think. Buyers will run their own valuations for free. At Baltic Family Capital, we rely on the Return on Invested Capital (ROIC) method, which is rooted in expected investment performance.
3. Step back from daily operations. Buyers want to see a company capable of thriving independently of its founder. It’s essential to recognize that stepping back from daily operations is a time-consuming process, but the right buyers can support a smooth transition.
We are confident that Baltic companies can replicate the LIFCO story with the help of a “forever investor” like Baltic Family Capital. With us, the rewards are financial as well as intellectual. This model suits both entrepreneurs who wish to fully exit the business and those eager to take their company into its next growth phase, whether through organic initiatives or through M&A.
