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.

0 Likes

3 Replies

27 Views

Replies

Reply by a searcher
from University of Michigan in Raleigh, NC, USA

Antonio hits on a lot of the reasons I see happening. Not only is it founder dependence as far as work/relationships go but it's also decision making. Even when the owners "only work 1-2 days per week" in the business, they are making decisions every day. Side note, what takes the owner of 20 years 2 days to do would take the new owner 2 weeks. I spend all my time in the home service space and the other issues I see are around keeping the staff. The business acquisition gurus tell you that you can just buy the business, be absentee, put a GM in place and stack cash. That's far from the truth. In the home service/trades world, all of the revenue is being generated by the technicians/field staff. Every technician that leaves is around $300-500k in top line revenue. Combine this with the limited supply and high demand for blue collar workers and you realize that they can leave your company and be hired by a competitor before the end of the day. If you don't know how to manage and lead the staff, they will leave quickly. A few technicians leave and you can no longer make debt service.

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.

+1 more reply.

Join the discussion