If you read only the headlines, 2026 looks like a great year to sell a company. But for a founder with a $20 million or $80 million business, the headline numbers describe someone else's market.
If you read only the headlines, 2026 looks like a great year to sell a company. PwC projects global deal value will reach about $4 trillion this year, roughly 13% above last year, even as the number of deals declines. The problem is who's driving that number. Transactions above $5 billion account for nearly half of all deal value, and once those megadeals are removed, deal value is actually down about 4%.
That's the market in one sentence: the giants are feasting, and everyone else is being asked to prove their worth. For a founder with a $20 million or $80 million business, the headline numbers describe someone else's market.
The rate environment just changed the math
On September 16, the Fed did something most owners weren't planning around. It raised its benchmark rate by a quarter point to a 3.75%–4% range, the first increase since 2023, and signaled another hike could come before year-end. The reason matters too: officials cited higher fuel costs from the Iran war and lingering tariff effects, and worry that prolonged energy prices could push inflation expectations up. Longer-term borrowing costs were already there; in the days before the decision, the 10-year Treasury yield was sitting near 4.97%, close to multi-year highs.
Here's why a founder should care. Most buyers in the lower middle market fund acquisitions with a mix of equity and debt. Deals in the $10 million to $500 million range carried average total debt of 3.6x EBITDA in 2025, down from a 4.0x peak in 2021. When debt is more expensive and lenders are more cautious, buyers can borrow less against your earnings. That gap has to be covered somewhere, and it usually comes out of the cash you receive at closing.
Cash at close is shrinking. Structure is growing.
This is the shift I'd want every founder to understand before they hire a banker. Buyers are still paying for durable earnings, low customer concentration, and management teams that can operate without the owner, but they're increasingly moving risk into earnouts and rollover equity rather than cash at closing.
That sounds like a financing detail. It isn't. An earnout means a meaningful part of your price depends on how the business performs after someone else owns it. Rollover equity means you're betting on the buyer's ability to grow what you built. In both cases, the value you actually realize is decided in the 12 to 36 months after closing, which is exactly where most deals quietly lose money.
The AI split: some founders are sitting on a windfall, others on a repricing
The capital pouring into AI is real, and it's lopsided. The four largest hyperscalers have guided to a combined $670 billion in 2026 capex. That spending pulls demand through an entire supply chain that looks nothing like Silicon Valley. Recent data center products and services deals have traded at 8x to 19x EBITDA, with a median of 11.5x. Compare that to the broader market, where GF Data contributors reported an average multiple of 7.3x EBITDA in Q1 2026. If you own an electrical contractor, a cooling or power services firm, an engineering practice, or a managed services business with hyperscale exposure, you may be worth considerably more than you think.
The other side of the split is software. Agentic AI tools that can automate work previously handled by software have triggered a rapid repricing, with buyers separating platforms that have deep moats from point solutions that can be replaced. PwC sums it up plainly: power and data centers are hot, while software has cooled as buyers reassess disruption risk. A founder whose valuation expectations were set in 2021 may walk into diligence and hear a very different number.
Why buyers still need to transact, and what that means for you
Private equity isn't going anywhere. U.S. PE dry powder approached $1.1 trillion at the end of 2025, and sponsors are feeling pressure from their own investors. Limited partners are no longer willing to accept paper marks as proof of performance, which means sponsors need to buy well and exit well.
For most founders, that translates into becoming an add-on rather than a platform. Add-ons are expected to represent most PE activity in 2026, and integration readiness with a clear 100-day plan is what separates the winners. In other words, the buyer isn't just pricing your EBITDA. They're pricing what it will cost, and how risky it will be, to fold your company into theirs.
The founder's real exposure: integration
This is where I've spent my career, and it's the piece most sellers underestimate. In a market like this one, the deal gets priced on the buyer's confidence that your business can be separated, stood up, and integrated without drama. If your finance function lives in your head, if your IT runs on shared contracts with a sister company, if your top three customers are relationships only you hold, the buyer sees integration risk. Integration risk becomes a lower multiple, a bigger earnout, or a longer escrow.
And after close, the earnout you negotiated lives or dies on integration decisions you may no longer control: which systems get migrated first, which people stay, how quickly a transition services agreement expires. As one analysis of roll-ups put it, buying cheap add-ons only turns into real returns if the integration works, and plenty of roll-ups have ended up as incoherent companies.
What a founder should do right now
The market isn't closed. It's selective. The founders who will do well over the next 12 months are the ones who treat exit readiness like an operating project, not a banking event. That means building a second layer of management so the business doesn't depend on you, untangling any shared services or entities before a buyer finds them, pressure-testing your AI exposure honestly (are you a beneficiary, or a target for disruption?), and walking into any LOI already understanding what Day 1 and the first 100 days would look like under new ownership.
Rates will move again. The AI cycle will cool or accelerate. What doesn't change is that buyers pay more for companies that are easy to own. Make yours one of them.