The Gap Equity Problem In Search

2025 was supposed to be a big bounceback year for M&A. Through a combination of declining interest rates, more attractive lender packages, easing labor constraints, and ample dry powder anxiously sitting on the sidelines, 2025 was set for a rebound in transaction activity. Those plans appear to be tabled with growing concerns over inflation, impact of tariffs, and recessionary fears###-###-#### has turned into an incredibly challenging fundraising environment. In our latest blog post, we dig deeper into the current search landscape and a growing topic of concern in the search world: gap equity. The bar continues to be raised for transactions to have sufficient equity to close deals. With a growing number of new searchers, limited capital, and increasingly busy investors, the search space continues to evolve. After many dead deals during 2024, RiverStone assisted five clients reach a successful closing during Q1 2025 including a traditional searcher, two self-funded searchers, a HoldCo investor, and an independent sponsor. The evolving macroeconomic environment may continue to put pressure on M&A and small businesses posing risks as well as creating opportunities for searchers to acquire interesting companies at attractive valuations. We hope you find this market update to be insightful and transparent as we all continue to navigate M&A challenges in real-time. Reach out to our RiverStone team today redacted if you'd like a copy of our latest services deck, case studies of successfully closed transactions, and ways we can add value to your search. Latest Blog Post: The Gap Equity Problem in Search