What will 2026 bring for business owners looking to exit?

We asked M&A advisors, brokers, and other professionals to share their predictions for this year. Of the 17 players who contributed:

• Most focus on the digital and online space, including agencies and tech-enabled services, software and SaaS, e-commerce, and media and content businesses
• A few sell main street businesses
• All focus on 6, 7, and low-8 figure sales

A note on perspective: The advisors we surveyed make their living helping people sell businesses, so they have a natural incentive to be optimistic about market conditions. Their livelihoods depend on active buyers and sellers. While we trust their expertise and frontline insights, it’s worth keeping this context in mind as you read their predictions.

Here are eight major trends that emerged from their responses.

8 key trends for M&A in 2026

1. Strong activity and pent-up demand expected

Many advisors predict 2026 will be more active from an M&A perspective than the last few years.

“I think we’ll see the most activity we’ve seen in three years as the economy stabilizes,” says Jonathan Baker, Practice Lead for M&A Services at Punctuation.

Marla DiCarlo, Owner and CEO of BizNavigators, agreed: “2026 is expected to be a strong, growth-oriented year for M&A, driven by improving interest rates [and] increased buyer confidence.”

But some advisors urge caution about macro factors, citing a possible continuation of the economic uncertainty we saw in 2025.

“For 2026, I think we will see more of the same we saw in 2025, with totally unexpected events impacting the market with wild swings,” Marty Fahncke, Certified M&A Advisor at Westbound Road. “We need to be nimble, creative and patient, and deals will still get done.”

The ever-shifting tariff landscape in particular was challenging in 2025. “The uncertainty made deal-making very difficult” for e-commerce companies, said Nate Jackson, Partner at Two Roads Advisors. “We see this stabilizing [for] 2026 and expect to see an uptick in consumer product companies who decided they’re ready to come to market.”

Dylan Gans, co-founder at Baton, echoed those sentiments: “If the external macro factors don’t surprise us, then we’ll be in a good spot.”

2. Buyers are getting more sophisticated

One of the most significant shifts is that buyers are becoming more educated and selective.

Put simply, “buyers are getting smarter,” said Nick Santillo, M&A Advisor at Anny.Biz.

BizNavigators’ DiCarlo explained: “Buyers in the lower-middle market are becoming more sophisticated, often joining peer groups, investment clubs, and education-focused communities that help them better understand what to look for in a business.”

“As buyer knowledge increases,” she continued, “it becomes even more important for sellers to clearly understand their value drivers—such as recurring revenue, strong margins, operational systems, and clean financials—and to price their business realistically.”

The best way to appeal to smart buyers? “Know buyer KPIs and how you stack up,” said Chris Erwin, Founder at RockWater.

3. Buyers want low-risk investments

This buyer sophistication translates into heightened risk awareness.

“Buyers are far more disciplined about underwriting risk these days, so if a business lacks strong unit economics and clear profitability, it becomes significantly more difficult to deliver a successful exit,” said James Creech, Founder of Quartermast Advisors.

Practically, that means buyers are avoiding businesses with concentrated risks—single customers, single revenue streams, single traffic sources, or heavy platform dependency.

“A lot of digital businesses inherently rely on a single tech giant for their traffic (Google, Amazon etc.) and buyers are becoming less interested in this,” Gregory Elfrink, Director of Marketing at Empire Flippers. “They want to hedge their bets and have businesses with margins that can support omnichannel marketing efforts.”

4. Recurring revenue remains a top priority

If there’s one thing buyers agree on, it’s their appetite for predictable income.

“Recurring revenue is certainly one of the biggest asks we are seeing,” Punctuation’s Baker said.

Brendan Balthis, Client Team Leader at Tuck Advisors, sees a similar trend. “Buyers are very focused on quality assets with recurring revenue, clean financials and clear growth drivers, and are willing to pay up when those boxes are checked.”

This preference for predictable revenue cuts across all business types. The flip side? Project-based revenue is less appealing.

“Businesses with project-only revenue are deeply struggling in an uncertain economic climate,” said Carrie Kerpen, Co-Founder and CEO of The Whisper Group. “Buyers just don’t want to take the risk.”

5. Quality and preparation matter more than ever

With buyers becoming more sophisticated, the gap is widening between well-prepared businesses and those that aren’t ready for scrutiny.

“Being prepared is critical,” said Adam Shaw, MD Corporate Finance at Collingwood. “Make sure the narrative you are selling to a buyer is fully supported by your financials and KPIs, so that when a buyer goes into diligence they can do this quickly and efficiently. The quicker the process, the more certainty you’ll have on getting a deal done.”

Karl Sakas, Agency Exit Advisor at Sakas & Company, also stressed the importance of thinking ahead. “Your exit is shaped long before you go to market,” he said. “The founders who prepare 12–24 months in advance—stabilizing margins, strengthening leadership, reducing owner dependency—consistently achieve better valuations and better terms.”

For many businesses, that means focusing on the fundamentals. “Do the boring stuff well,” said Kyle McCulloch, Managing Director at bizval Global. “Focus on building a high-quality business at every step, in every interaction, with every employee.”

6. SBA financing has become more challenging

While overall market conditions show signs of improving, one specific friction point has emerged: SBA financing has become more difficult to navigate because of legislative changes in 2025.

“SBA businesses are harder to finance,” said Ryan Condie, M&A Advisor at Quiet Light. “We are still doing them often, but there have just been more hiccups in the road with SBA than in prior years.”

Santillo of Anny.Biz agrees: “SBA tightening has made things more difficult. Buyers are more selective.”

This doesn’t mean SBA-backed deals aren’t happening—they are—but both buyers and sellers need to build in more time and flexibility for the financing process. It’s another reason why preparation and clean documentation are more important than ever.

7. AI is creating both opportunities and threats

Artificial intelligence is reshaping buyer priorities in contradictory ways, creating opportunities for some businesses while threatening others.

On one hand, “obviously AI is all the rage,” said Joe Burrill, Founder & CEO of Just Website Brokerage. “Any businesses using AI effectively and in a high-quality way will be more desirable than ones without.”

On the other hand, buyers are increasingly careful not to invest in a business that could be replaced by AI in a few years. That’s driving demand for businesses that can’t be easily automated.

“We are seeing a large uptick in buyers who are looking for businesses that they feel can’t be replaced by AI,” said Jennifer Smith Broeckling, Business Broker at Murphy Business Sales. “This has meant people calling looking for construction, HVAC, anything in the trades. These businesses still need people who do the manual work. We’re actually starting to see multiples in some of these industries tick up due to the demand.”

The key for sellers is having a clear story about how AI affects their business model—whether as an opportunity to improve efficiency, a competitive advantage they’re leveraging, or a defensive moat because their work requires human expertise.

8. Private equity is moving down-market

Another significant structural shift is pirate equity firms expanding into smaller deals—territory that was previously considered too small for institutional buyers.

“[There’s] massive interest in the $1-2 million EBITDA market—no longer too small for PE, and not necessarily too big for strategics,” said Kerpen of the Whisper Group.

This creates new opportunities for mid-sized businesses that previously struggled to find sophisticated buyers. It also means more competition and higher valuations in this range, as PE firms bring more capital and longer-term thinking to deals that used to be purely strategic or individual buyer transactions.

So is this the year to sell your business?

The truth is that market performance is only a small piece of the puzzle when it comes to choosing the best timing for your sale.

“People should buy and sell based on their life circumstances,” Baton’s Gans said, “not trying to time the market.”

Business performance matters, too. And when business performance and life circumstances both line up well for a sale, that’s when it’s time to run a thoughtful, structured process.

If you’re considering an exit in the near future, focus on the fundamentals: clean financials, recurring revenue, operational systems, diversified risk, and reduced owner dependency. Our course The Exit Playbook walks you through how to get prepared.

Buyers are more sophisticated than ever and willing to pay premium multiples for businesses that check all the boxes—but they’re walking away faster from businesses that don’t.

“The days of ‘name your price and someone will pay it’ are gone,” said BizNavigators’ DiCarlo. “But if we prepare well, price realistically, and structure intelligently, this is a very good time to be in the market.”

More M&A predictions for 2026

Several of our partners release annual reports sharing M&A insights. Here are a few you might want to dig into:

• bizval’s Q1 2026 U.S. M&A Report
• Quartermast Advisors’ 2026 Creator Economy M&A Report
• The Collingwood Market Report (focus on media and events companies)

*****

We like to keep a historical record of our “what’s the M&A market like now” columns, so previous columns are below.

What’s ahead in M&A for 2025

Published in December 2024

What’s the market like now for selling an online business?

We asked M&A advisors and active buyers how things are going in Q4 2024.

The ten players who gave us insight all focus on what we consider our sweet spot at They Got Acquired: the digital/online space, with a focus on 6, 7, and low-8 figure sales. We’re talking about agencies and tech-enabled services, software and SaaS, e-commerce, and media and content businesses.

First we’ll summarize some of the themes that emerged from their answers. Then we’ll share more specifics offered by each expert.

M&A themes for Q4 2024

1. Market recovery and optimism for 2025

Many experts noted the market is slowly improving compared to last year. With interest rates decreasing and a “new normal” settling in, there’s a general optimism for 2025 and an expectation of increased M&A activity going forward.

2. Trends are sector-specific

SaaS and recurring revenue models are consistently hot, with buyers actively seeking businesses with predictable income streams.

E-commerce and direct-to-consumer (DTC) brands are also regaining interest, particularly for those leveraging AI and sustainability initiatives. Distressed businesses, which right now tend to include certain agencies, e-commerce, and content businesses, can be harder to sell due to weaker recent performance or market shifts, but may appeal to buyers looking for turnaround opportunities.

3. Buyers want to avoid risk

Across multiple sectors, buyers are showing caution towards businesses with concentrated risks, such as reliance on a single customer, revenue stream, or traffic source. Diversified revenue and customer portfolios are critical to attracting buyers and achieving successful exits.

4. Going back to basics

Great businesses, those with solid financials and operational excellence, continue to be highly sought after. While businesses that have had a tough few years can be difficult to sell — and many founders find themselves in this space right now — there’s no shortage of buyers looking for businesses that nail all the fundamentals.

5. Upcoming election and economic uncertainty

The upcoming election in November 2024 and ongoing economic uncertainty have introduced some hesitancy in the market. However, many believe the post-election landscape, combined with potential interest rate cuts, will drive a more favorable M&A environment in 2025.

More specifics on what’s happening in M&A for Q4, 2024

Here are the questions we asked:

1. What’s the market like right now? (Q4, 2024)
2. How does the market this year compare to last year?
3. Is the M&A market hot for any types of businesses in particular?
4. Are there any types of businesses you’re seeing struggle to sell?
5. What do you think next year (2025) will bring for M&A?
6. Anything else you think is important?

Here’s what these brokers and buyers told us.

1. What’s the market like right now? (Q4, 2024)

“There’s more optimism than there has been, and more sellers are thinking about entering the market. Buyers have been active for the past few years, so it’s really about finding enough sellers to fill the need.”

— Jonathan Baker, Practice Lead, M&A Services of Punctuation.com

“The market is still strong and there are a lot of sellers under $5 million in enterprise value looking to sell. There are more individual/solo buyers looking to purchase their first business.”

— Marla DiCarlo, Owner and CEO of BizNavigators

“Activity is picking up a little but I wouldn’t say it is much improved compared to the previous years. Less fear than 2022 and 2023, but multiples are around the same.”

— Dominic Wells, founder of Onfolio, a firm that buys online businesses

“Digital media, technology, and the creator economy… have been pretty active M&A markets this year. There’s a big push in Q4 to finalize deals that have been in process from earlier in the year, so we expect a few more closings before the holidays. New deals, however, will likely kick off in January as buyers otherwise spend Q4 delivering against EOY sales targets and finalizing 2025 budgets.”

— James Creech, founder of Quartermast Advisors

“The market is picking up. We are seeing many new buyers inquiring about businesses and reaching out to share their buying criteria with us.”

— Jon Hainstock, M&A Advisor of Quiet Light

“Agencies are primarily worried about slow sales pipelines, rather than having a lucrative exit. People are hunkering down, to grow again in 2025 and beyond.”

— Karl Sakas, Agency Advisor, Sakas & Company

“E-comm brands are once again becoming targets for larger organizations and private equity firms. PE is especially warming up on DTC right now. Meanwhile, more brand owners are acquiring smaller complementary brands to their own portfolio, including strategic moves to scale faster, to add more lines or break into new markets, or simply take more market share by having more ‘brand real estate’ in that niche.”

— Ben Leonard, co-founder, Ecom Brokers

“The market is mixed, we are still dealing with a lot of headwinds. Covid was an artificial boost and now we are normalized. This results in a breakdown between the multiple the buyer is assigning compared to the seller’s expectations. There is also a lot of anxiety in the market relative to the economy in general and the election cycle, which regardless of direction, introduces uncertainty, aka risk to the market. In short, there are a lot of unusual factors that are making deals face resistance and while deals are getting done, they are more difficult, take more time and are more likely to have revised terms.”

— Tom Howard, Senior Broker, Website Closers

“Q4, 2024 is picking up steam. People are looking forward to having the election be done and moving on with business. In addition, interest rate cuts have already given a boost to confidence and it will allow for valuations to increase a bit more. You have already seen some of this with a few large acquisitions happening and there are also more companies that are getting ready to go to market at the beginning of 2025.”

— Lori Murphree, Managing Partner, Evalla Advisors

“I’d say cautiously optimistic for M&A. Buyers have bandwidth (and cash and/or public or private stock) to get good deals done at reasonable valuations. Startups that are out of cash are out of luck, if they haven’t shown traction and gotten to break even.”

— James Marciano, Founder of Tuck Advisors

2. How does the market this year compare to last year?

“2023 was tough. M&A is really warming up again now and I am very bullish. If you got through 2022/23 then be aware that buyers are paying attention.”

— Leonard at Ecom Brokers

“Pretty similar to last year but I think that changes in the very near future as we emerge from election season, interest rates fall and hopefully we see some economic rebound. ”

— Howard at Website Closers

“Somewhat better. Less noise — companies that have not made it are going away. What’s left are stronger companies with the opportunity to be acquisitive.”

— Marciano, Founder of Tuck Advisors

“There’s a lot of ‘wait and see’. After agencies saw a drop in profits in 2023, revenues and profits are trending somewhat better in 2024. But if owners didn’t exit based on their 2022 financials, they’ll likely wait 2-3 years to get back to those valuations.”

— Sakas at Sakas & Company

“The market is stronger this year as compared to last year. Although it is an election year there are still great businesses wanting to sell.”

— DiCarlo at BizNavigators

“Last year at this time, it seems like more deals were falling apart; this year, it seems like more companies are getting ready to start a process.”

— Murphree at Evalla Advisors

“We’re in a much healthier place this year. We have visibility to decreased interest rates and increased borrowing power, and small firms have had time to stabilize and recover.”

— Baker at Punctuation.com

“Overall, deals are taking longer to close than last year. This is primarily due to more struggling businesses and higher interest rates. Higher interest rates affect things in a few ways. First, potential buyers are getting good returns in savings accounts, which makes them less likely to invest in riskier assets. Second, but not as much of a deal breaker, is that you have higher interest rates on loans, which makes cash flow forecasts more challenging for buyers. In these situations, you need to find the right buyer for the business, and that can take longer than when you have a market flush with cash and are looking for alternative investments.”

— Hainstock at Quiet Light

“Overall activity is up this year compared to last year, at least in our markets.”

— Creech at Quartermast Advisors

3. Is the M&A market hot for any types of businesses in particular?

“We are seeing lots of demand for SaaS-like firms with recurring revenue.”

— Baker at Punctuation.com

“We have seen a lot of international agencies looking to buy agencies in the U.S.; we have also seen more PE trying to get into the marketing services sector.”

— Murphree at Evalla Advisors

“I have more buyers looking for businesses in the pet and tour industry. Buyers are looking for businesses with a brand reputation and free cash flow.”

— DiCarlo at BizNavigators

“We’re seeing a lot of interest in influencer marketing agencies and talent management firms as those markets continue to consolidate. Both strategic and financial buyers are particularly interested in companies with meaningful operating history (5+ years), consistent growth (20%+ YoY), and profitability (15% – 20%+ EBITDA).”

— Creech at Quartermast Advisors

“Aside from AI, which has been hot for a while, I don’t think there’s any particular sector or business model that is hot, but there are some things which are cold, like content sites or FBA.”

— Wells at Onfolio

“In my experience, B2B SaaS, or anything with substantial recurring revenues, is desirable. We’ve also seen some dropshipping businesses do very well recently. While the margins in these businesses are typically lower, the model is less intimidating to buyers looking for alternative investing opportunities. Experienced buyers have been more patient and are looking for growing businesses with strong differentiation or distressed assets that they can restructure or turn around.”

— Hainstock at Quiet Light

“There’s a growing market for acquiring ‘distressed’ agencies. If someone is tired of agency life, they might consider selling at a ‘fire sale’ price. But the seller won’t make much, and the acquirer needs to be ready to execute a turnaround plan. In contrast, agencies with stronger financials will likely wait until 2025 or 2026 to exit.”

— Sakas at Sakas & Company

“Tech and AI for sure. From an ecom perspective that means brands that are using AI to enhance the customer experience (like personalised shopping), automate support, or manage inventory are becoming hot targets for acquisition.

Also sustainable, ethical ecom brands are more and more attractive. eco-friendly products or a transparent, responsible supply chain, are aligning with what today’s investors want.”

— Leonard at Ecom Brokers

“We focus primarily on healthcare and education. I wouldn’t say either are “hot” right now.”

— Marciano, Founder of Tuck Advisors

“Yes, definitely buyers are seeking lower risk — multi-channel sales, longevity, stability, clean and clear financials, established categories — in difficult markets, buyers seek stability and strong businesses with lower risk factors and solid metrics are going to see disproportionate buyer interest. Great businesses, priced at market rate multiples, will be quickly pursued as they stand out right now.”

— Howard at Website Closers

“Any software business that truly does serve as a system of record – a core system – for customers in its vertical market still has very strong appeal. Buyers want to know that AI can help, not hurt, their acquisition economics, and being a system of record vs. a nice-to-have add-on is key to that thesis.”

— Chris Reedy, co-founder of Big Band Software

4. Are there any types of businesses you’re seeing struggle to sell?

“Businesses that rely upon a single channel or customer acquisition strategy are more difficult to sell. For example, a brand exclusively selling on Amazon or deriving nearly all traffic from Meta. Concentrated risk will make a business more difficult to sell.”

— Howard at Website Closers

“Businesses that heavily rely on automated ad revenues, which have been adversely affected by Google’s changes, have become difficult to sell. In the past, content businesses were highly desirable due to their simplicity. However, algorithm changes have severely impacted many sites in this category. If you are creating a content site, it’s essential to explore ways to diversify your revenue streams through ads, sponsorships, memberships, affiliates, etc., to have a more compelling story when it comes to selling.”

— Hainstock at Quiet Light

“For most agencies, 2023 was the worst year in over a decade. Many saw a drop in EBITDA, which hurt valuations. If they sell now, they’ll exit at a relative ‘discount’ compared to selling at their 2022 valuation.”

— Sakas at Sakas & Company

“After the tough years, I believe e-comm is back! But only for legit brands. the days of brick-a-brack amazon businesses selling for wild multiples are well and truly over and are not coming back. To get acquired, you need to build a legit consumer product brand.”

— Leonard at Ecom Brokers

“Businesses that have not done so well but the owners are just tired. However, this is always the case.”

— Murphree at Evalla Advisors

“Any companies that aren’t break even will struggle to sell. Any companies that have raised a lot of cash need to be really clear that their expectations are reasonable, otherwise buyers will assume the worst.”

— Marciano, Founder of Tuck Advisors

“There are fewer buyers all around so a lot of businesses are struggling to sell, but I’m not sure if it is down to the business model itself, or the fact a lot of businesses had a rough 2022 + 2023 which makes their P&Ls less appealing.”

— Wells at Onfolio

“Client concentration (one client as a large percentage of your revenues) has been a major red flag lately. Buyers want to see your client risk spread out across a healthier client portfolio.”

— Baker at Punctuation.com

“Buyers seem to be particularly cautious around businesses with higher risk profiles, e.g. heavy customer concentration or platform dependency considerations. Such risks can often be mitigated through deal structure, but many buyers have been unwilling to engage with what they perceive to be ‘riskier assets,’ even if those businesses have solid fundamentals and are exhibiting strong growth.”

— Creech at Quartermast Advisors

“A software business where the revenue is in decline indicating a poor competitive position is tougher to sell now because of the time and risks involved in a turnaround in the context of slowing software spending / harder growth overall in most markets.”

— Reedy at Big Band Software

5. What do you think next year (2025) will bring for M&A?

“I think it will be a very busy year for M&A.”

— Murphree at Evalla Advisors

“I think we will see a number of factors that help boost M&A, including another year from COVID establishing a normalized earnings curve, lower interest rates making capital more accessible, and a move past the election jitters. Also, we will see capital that may have been on the sidelines looking to be deployed.”

— Howard at Website Closers

“It’ll be better than 2024!”

— Marciano, Founder of Tuck Advisors

“I think we’ll see a lot more transactions in 2025, and generally, the market might lean back towards buyers as more sellers try to capitalize on the past few years.”

— Baker at Punctuation.com

“I believe it will be a strong year with more businesses under $5 million in revenue for sale. This is due to the transfer in baby boomer wealth and businesses that waited to sell following COVID and the election.”

— DiCarlo at BizNavigators

“We expect to see even more M&A activity next year, as we enter a lower interest rate environment and get past the chaos and uncertainty of an election year.”

— Creech at Quartermast Advisors

“I think 2025 will see an improvement in activity as more capital becomes available and confidence picks up. It will take a while though, but is already in motion.”

— Wells at Onfolio

“I believe 2025 will be stronger overall due to increasing buyer activity and lower interest rates. With many buyers and sellers waiting until after the election, we could see a surge in Q1 and Q2 of 2025.”

— Hainstock at Quiet Light

“Agency owners are tired of the daily grind of running their people-intensive firms. Some will exit for a moderate price based on relatively weak performance in 2023 and 2024. Other agency owners will look to hire someone to run the business so the owner can step back and become the ‘chair’ of the company. And for the rare agencies that did very well in 2023 and 2024, they can demand premium multiples in 2025.”

— Sakas at Sakas & Company

“M&A will pick up, especially for ecom brand that have embraced tech and AI. more PE deals. If you have the growth, they have the capital. ”

— Leonard at Ecom Brokers

“Continuing movement of larger private equity firms and their platforms into smaller pockets of software buys.”

— Reedy at Big Band Software

6. Anything else you think is important?

“It is still important for business owners to prepare to sell their business. Buyers are looking for good businesses with growing revenue, strong free cash flow, trained staff, and good reputation allowing the business to thrive and grow.”

— DiCarlo at BizNavigators

“If you are planning an exit, pay attention to the basics. Reduce risk in the business, including eliminating seller dependency, customer, channel or SKU concentration, flawless financial reporting, SOPs, solid growth strategies in place and a realistic view of valuation. Professional representation is always more important in a bear market too, so partner with established professionals with specific category experience.”

— Howard at Website Closers

“There is still too much capital and not enough TAM (total addressable market). That’s the macro issue. I don’t see that resolving anytime soon.”

— Marciano, Founder of Tuck Advisors

“The sellers who achieve the best outcomes are typically those who are the most prepared. We recommend getting organized for an M&A process about 12 months in advance to make sure you know what to expect and can deliver strong results throughout the process.”

— Creech at Quartermast Advisors

“Plan for your exit. If you want more options, it’s never too early to start.”

— Sakas at Sakas & Company

“Depends on the election result! If regulations ease up, e-comm brands could find cross-border M&A deals a lot smoother. Lower compliance costs and fewer hurdles means more opportunities for small brands to strike deals globally.”

— Leonard at Ecom Brokers

“If the costs of acquisition debt go up – either because of interest rates or changes in the perceived risk premium needed by banks – 2025 could be a harder year to exit.”

— Reedy at Big Band Software

April 2023: What’s the M&A market like now?

What’s the market like now for selling an online business?

With the recent fallout of Silicon Valley Bank, some entrepreneurs who’d planned to sell are asking whether now is still the right time.

The truth is, whether it’s the right time to sell your company is based on lots of factors. Yes, market outlook is one of them, but you also want to consider the performance of your business, trends in your particular space, and your own personal bandwidth for continuing to grow the company.

Still, we hear business owners digging on whether it’s a seller’s or buyer’s market, how the SVB fallout is affecting the acquisition landscape, and how you should navigate current market conditions.

We asked players in the space, including M&A brokers and active buyers, some of your burning questions, including:

1. What’s the market like right now for selling a business?
2. Is the SVB fallout affecting the acquisition climate?
3. Have some buyers paused acquisitions?
4. Anything else you think is important?

Here’s what they told us.

1. What’s the market like right now for selling a business?

“The market is generally still stable but naturally there is an undercurrent of nerves and the froth has definitely come off the top… Multiples are starting to come down, businesses are staying on the market longer, and sellers are typically accepting less cash up front, but it is still a seller’s market. It’s not a terrible time to sell, but not as frothy as 2021.”

– Dominic Wells, founder of Onfolio, a firm that buys online businesses

“There’s no doubt that 2022 was rough. At the tail end of 2022 and into 2023 activity has definitely picked up. There was less of a valuation expectation gap as founders realized that 2021 was not the new normal and buyers stopped being quite so spooked the world was going to end.”

– Einar Vollset, managing partner of Discretion Capital, which brokers B2B SaaS deals, and general partner at TinySeed, a SaaS accelerator

“The market is aggressive right now with a 0.5 drop in multiples. For example, companies that were giving a 3x multiple, have dropped to 2.5x.”

–  Natarcia Codner, co-founder of Codner.co, a mastermind that sets up e-commerce owners to sell

“If you are a seller, expect compressed multiples compared to the last few years. Higher interest rates have pushed them down, and buyers are expecting better deals. The good news for sellers is that the buyers who are still around are well-qualified and ready to pull the trigger. They realize multiples are down, and if they have the cash to spend, they understand now is the time to buy.”

– Justin Harris, a broker with Website Closers, which focuses on online companies

“Still a very hot seller’s market. We’ve actually seen an increase due to business acquisitions becoming very hot and trendy.”

– Christine McDannell, business intermediary at The Magnolia Firm, a brokerage that helps founders sell

“Seems the tide is turning, becoming more of a buyers’ market. That said, buyers are proceeding with more caution, going a little bit heavier on diligence and mitigating downside risk more than they would have previously.”

– Paul Kelley, VP of M&A Marketplace at Acquire.com, a marketplace that connects buyers and sellers

“The market has been slow compared to previous years. We still have buyers looking to buy businesses, but sellers have been slow on making decisions to move forward to sell their business. With the increase in interest rates, the weak economy and what I am calling ‘PTSD’ following Covid, it is causing fear and doubt with our sellers and buyers.”

– Marla DiCarlo, CEO of BizNavigators, a brokerage that helps business owners sell

2. Is the SVB fallout affecting the acquisition climate? If so, how?

“Most banks have stopped lending, but there are still funds and other firms lending, so SVB hasn’t had a huge impact yet.”

– Wells of Onfolio

“I have not seen this have any impact on buyers being able to get their funds or receive funding. Interest rates are a bigger play here with the general macro-economy outlook.”

– Ryan Condie, M&A advisor at Quiet Light brokerage, which supports founders selling online businesses

“We have yet to see it impact our buyers. There have been a few conversations surrounding it, but nothing that has changed a deal.”

– Harris at Website Closers

“I would argue that the impact of AI is currently having a more significant effect on the market than the recent bank fallout. Think about some of the models; a content website or an agency, various business models are being rapidly influenced by the new AI tools that are emerging almost daily, often built upon the foundation of ChatGPT.”

– Kelley at Acquire.com

“SVB fallout has not affected acquisitions much… The same principles apply as before — a profitable business that provides solutions and understands its audience is still attractive to a sophisticated buyer.”

– Codner at Codner.co

3. Have some buyers paused acquisitions?

“Yes, some buyers have but most have not. There is still an unquenchable thirst from buyers with not enough businesses going to market.”

– Condie at Quiet Light

“There are fewer buyers in the market, but the ones left are ready to buy. There was a pause mid-year last year, but now activity is back up.”

– Harris at Website Closers

4. Anything else you think is important?

“Multiples have come down since the peak of 2021 but multiples didn’t go into the dumps for good businesses. If you were going to get a 4x in 2021, you probably are at a 3.3-3.5x. If you were at a 3.5x, you’ll probably be in the 3x range, etc. The bigger piece is you can’t time the market. You can’t time things to be perfect in your business either. Selling needs to come from your own energy cycle on your own projects and when you think it’s time for you to move on. Pairing that with your ability to hit your exit goals is key.”

– Condie at Quiet Light

“The ‘market top’ is a mirage that you should probably ignore as a seller.”

–  Vollset at Discretion Capital

“If you are a seller, realize it’s not 2020; the multiples are compressed, and you have to deal with that reality if you want to exit.”

– Harris at Website Closers

“It’s becoming more and more of a buyers market as listings start to outweigh buyer demand… However, startups that are profitable, have great profit margins, and open to different deal structures are getting tons of activity upon going to market.”

– Rainier Nanquil, M&A advisor at Acquire.com, a marketplace that connects buyers and sellers

“Don’t get discouraged. Of course the media needs to attract as many eyeballs as possible and it’s human nature for fear to get our attention… Be sure to seek out real-life examples.”

– McDannell at The Magnolia Firm

This post contains affiliate links from our partners. If you use their service after clicking our link, The Got Acquired may receive a commission.