A few times in a cycle, the conditions for a transaction line up properly. Capital is moving. Buyers are deciding. Regulators are predictable. Financing is available on terms that do not insult the seller. Right now is one of those moments, and most founders I speak to seem to assume it will hold for another year or so.
I am not sure it will.
The current environment exists because a particular alignment is in place — private credit is funded and competing for quality at lower-middle-market scale, strategic acquirers are mandated to deploy in payments, embedded finance, regtech and digital identity, and PE dry powder is finally being put to work at sub-$50m EBITDA cheques after several quarters of hesitation. None of these conditions are accidents. They are the product of a macro and political backdrop that, for the moment, is pulling in roughly the same direction.
That alignment is on a clock. The US election midterms are in November, and the consensus across Cook, Sabato's Crystal Ball, Inside Elections and the major prediction markets is that the House is materially likely to flip and the Senate is genuinely competitive. Whatever one's politics, the market read is straightforward: divided government, returning potentially in January 2027, and the policy gridlock and committee-level scrutiny that tend to follow.
The piece most founders miss is that this matters for the lower and middle market sooner than it does for large cap. Megadeals can absorb a fair amount of political turbulence — they have the patience, the financing, and the buyer pool to wait it out. Lower- and middle-market transactions cannot. They depend on macro fundamentals, on CEO confidence, on a financing stack that holds together at scale, and on a buyer pool that is mandated and motivated to deploy. When confidence wobbles, this is where the wobble shows up first. Middle-market deal volume in the US was already down material through Q3 2025, and the recovery since has been steady rather than emphatic.
Windows in this business rarely close with a bang. They narrow, quietly, while everyone is still telling themselves they have time.
The mechanism is rarely a closed door. It is a slower process. A lower headline number. More of the consideration deferred into earn-outs and seller notes. A buyer who, six months earlier, would have moved. The conditions that make a transaction work for a founder at this scale are largely the same conditions that buyers' deal committees re-test the moment a wider macro outlook turns less predictable.
For a founder weighing a 2026 or early-2027 transaction, the implication is not urgency. It is sequencing. The work that materially changes the price and the terms of a deal — clean financials, documented regulatory readiness, a defensible standalone plan, a clear view of which buyers are actually mandated to deploy — takes six to nine months to do properly. Started now, it puts a founder in the window. Started later, it does not. The pattern I have watched, more than once, is the same: founders treat a recovering market as a long runway, and recognise the moment they could have moved only afterwards.
The conditions in front of us are good. They are also conditional. The window is open, re-rated, narrower than the headlines suggest, and, for the part of the market I spend my days in, more sensitive to the political calendar than most founders are pricing in.
If a transaction is plausibly on your horizon in the next eighteen months, the question worth pressure-testing this quarter is not whether to move, but whether the work that lets you move is already underway
I'll be on the road over the coming weeks, mostly around conversations about M&A and growth capital. If our paths cross, even briefly, it would be good to connect.
12 May — London
13 May — Dublin
20–21 May — Stablecon, Amsterdam
1–4 June — Money20/20 Europe, Amsterdam
1–2 July — iGB L!VE, London (ExCeL)
If a 2026 or early-2027 transaction is plausibly on your horizon, or you are quietly pressure-testing readiness, I am always open to a thoughtful conversation.
And — if you have read this far, consider it a quiet compliment. A few prior pieces that I think sit alongside today's thinking rather well:
Securities Offered through Wellesley Hills Securities. Member FINRA/SIPC
