Succession Solutions: What Options Owners Really Have

There is no single path to succession, but several solutions — and which one is right depends less on the market than on your goals.

Do you want the highest price, the survival of the business, a solution within the family, or a clean break? Each answer leads to a different route. This overview shows the main succession solutions with their pros and cons.

Family-internal handover

Passing the business to the next generation is still the most common route in Austria, at around 55 percent. Its advantage: values, culture and the name stay in the family, and the transition is often smoother.

Its limit: it requires a suitable and willing successor — and both have become rarer. Children have their own careers. Where the wish for continuity meets a lack of suitability, a forced family solution does more harm than good.

MBO and MBI: handover to management

If no one in the family fits, attention often turns to your own people. In a management buy-out (MBO), the existing leadership team takes over; in a management buy-in (MBI), an external manager. Both know the business or bring fresh leadership — and the owner hands over to people they trust.

The hurdle is usually financing: managers rarely have the capital for the full purchase price. How the two routes differ is shown in "MBO vs. MBI".

The external sale

If there is neither family nor management as successor, the sale to an external buyer is the usual route — to a strategic buyer from the industry or to a financial investor. This route often achieves the highest price and secures capital and a future for the business.

What matters here, and which buyer types exist, is described in "Business succession without family" and "Strategic buyer or financial investor?".

Partial sale and equity participation

Not every succession is all-or-nothing. In a partial sale you give up a share and stay invested — for instance to stretch the transition over several years or to bring in capital for growth. A financial investor as a minority or majority partner can keep the owner on board and enable a second sale a few years later.

This route fits if you do not yet want to let go entirely but wish to spread risk or finance growth.

Foundation and special routes

For larger assets and long-term preservation across generations, special forms such as a private foundation may come into play. Such solutions are complex, demanding in tax and legal terms, and belong in the hands of specialist advisers. For most mid-sized companies they are not the first but a rarely fitting route — this context does not replace legal or tax advice.

Which solution fits you?

The choice is decided by your priorities. If continuity in the family is paramount, the route leads to an internal handover — provided a suitable successor exists. If the highest secure price matters, the external sale is usually right. If you want to stay invested, the partial sale is worth considering.

In practice, rarely just one option is examined. A structured process places the routes side by side and makes their consequences comparable — and the right lead time keeps all options open. When to begin is set out in "When is the right time for succession or a sale?"; the whole process is framed in "Business handover: the guide".

The best succession begins years before closing. Talk to IGCP Capital Partners early and in confidence — independent, discreet, on equal terms. → igcp.at

Frequently Asked Questions

What succession solutions are there?

The main ones are the family-internal handover, the management buy-out (MBO) and buy-in (MBI), the external sale to a strategic buyer or financial investor, the partial sale with continued participation, and special forms such as a foundation. Which one fits depends on your goals.

What is the most common form of succession?

In Austria, the family-internal handover slightly predominates at around 55 percent over the external route at 45 percent. As suitable family successors become rarer, external solutions such as a sale and MBO/MBI are gaining importance.

Can I stay invested after succession?

Yes, through a partial sale. You give up a share and remain a co-shareholder — this stretches the transition, brings in capital and often enables a second sale a few years later. This solution fits if you do not want to exit entirely straight away.

Which succession solution achieves the highest price?

Tendentially the external sale in a structured process with several interested parties, because competition protects the price. A family-internal handover, by contrast, often takes place at terms below market value. Which route is best on a net basis depends on more than price alone.