Some deals fail....this tells a story

May 16, 2026

by a searcher from University of Toledo in Shaker Heights, OH, USA

Currently, tens of thousands of acquirers (borrowers) are facing the loss of their home equity, their personal financial assets, etc... see this LinkedIn post: https://www.linkedin.com/feed/update/urn:li:activity:7460720914700066816?updateEntityUrn=urn%3Ali%3Afs_updateV2%3A%28urn%3Ali%3Aactivity%3A7460720914700066816%2CFEED_DETAIL%2CEMPTY%2CDEFAULT%2Cfalse%29 Let's discuss the probable factors that are driving these failures in hopes of establishing best practices to prevent adding our own names to this list.

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Reply by a searcher
from Drexel University in Philadelphia, PA, USA

Specifically for lower / middle market - the first thing that came to mind (speaking from experience) is underestimating founder dependency and the amount of revenue tied to the previous owner’s personal goodwill and customer relationships, and not having a transition plan to retain it post-close.

Reply by a professional
from Duquesne University in Stamford, CT, USA

I think it’s almost 100% underestimating what’s required to run the business. Even looking at the details, running the business can seem easy from an outside perspective. It can also seem easy to slap some tech on it, clean up ops, hire someone, and wipe your hands clean. That’s what’s pitched but it’s never that simple. There are so many moving factors, and the posts from Antonio and Paul highlighted some big ones that aren’t at all obvious in standard diligence - they come to light when you takeover, or if you have the chance to shadow the owner and really get a sense of what is dependent on them. Even if they’re working 15 hours a week, upfront you’ll probably need to do more. Asset ownership is really about owning the downside in addition to the upside. You have to have the strategic mindset to know what to do when it’s underperforming - hire, build, sell, fire, etc. It’s all yours. I think that a lot of first time buyers come from a corporate environment where they’ve owned projects, but in corporate you’re typically protected from the financial downside if a project fails even if you own it. It can definitely be a hard mindset shift, and I think that’s a piece of ownership that’s not taught or sold well to first time buyers right now.

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