Q&E: Acquisition Entrepreneurship Creates Rewarding Path for Rao

When most people think of an entrepreneur, they imagine someone building a company from the ground up.

Though Adam Rao (17 'MBA) has done that in the past, he is now focused on acquisition entrepreneurship, where he’s able to apply his management and entrepreneurial skills to grow an already existing business. 

Rao recently became CEO of Showcraft, a leading event marketing and exhibit production company that he and his company, Third Path Capital, acquired in October.

Before his role at Showcraft, Rao served as managing partner at Third Path Capital, a search fund for social good created to buy and build the Twin Cities' next great impact company. They acquired Showcraft in 2021. He also previously led corporate strategy and innovation at Sunrise Banks and served as the founding CEO at Exodus Lending.

Rao spoke to the Carlson School about the skills he thinks make someone a successful entrepreneur and what advice he would give current students.

You recently acquired Showcraft. Why was this something you were interested in getting involved in?

When I started my search for a business, I was very focused on the Twin Cities. Our mission was to help our investors buy and build the Twin Cities’ next great company. 

We didn't have a lot of specific industries we were targeting. Showcraft, in a lot of ways, was the right business for us. It has an incredible team and was led by a female entrepreneur for 25 years.

We initially wanted to avoid COVID-devastated businesses, and I think we kind of fell in love with the possibility of a company that had survived those circumstances and that had been around for as long as it had.

Are there any traits that you think make for a good entrepreneur?

I'm a firm believer that anyone can be an entrepreneur. We always talk about entrepreneurship in a way that means startup companies. But it doesn't have to.

For instance, there are social entrepreneurs who work on social issues. I also think there are freelancers who certainly take entrepreneurial thought processes and drive. Then there are people like me, who bought a business and aren't starting something from scratch this time around. I still consider myself an entrepreneur doing this, because I'm bringing these skills and tools and a way of thinking into my work.

We're starting to see this broadening of the idea of what entrepreneurship is and how it's more of a set of tools and a way of thinking. Because of that, I just that there are many different types of entrepreneurs and many different types of skills those people can bring to the table. I think so much of it is really about who you are, and then harnessing your own skills to create the entrepreneurial journey that you want to create. 

What advice do you have for current Carlson School students?

I think the biggest piece of advice that I can give, especially around acquisition ownership, is that today we always think about entrepreneurship as starting a company from scratch or that you need to have a $1 billion idea. But in reality, there are plenty of good entrepreneurial ideas that are $5 million and $10 million ideas. Not to mention, there are a lot of different paths, including corporate entrepreneurship and buying a company. 

I've started things from scratch. I certainly can do that. But I think we should talk about acquisition entrepreneurship a lot more because I do think it’s a great path. In the next decade or so, we’re going to have a lot of Baby Boomer business owners retire, and we will need people to lead those companies. There’s not a better time than right now if you’re interested in buying a business, running a business, or doing this kind of work. Whoever leads those kinds of companies is going to shape the future of small businesses in America, which is really important.