Why More Deals Are Closing, and More Founders Are Disappointed

Global M&A activity saw a massive resurgence in 2025, with total deal value finishing the year at $4.7 trillion, a 43% increase from 2024.

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Mid-market advisors report that valuation gaps are finally closing, with 50% of advisors expecting “above-average” deal volume through the end of 2025, confirming a return to a “busy steady state.”

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On the surface, this looks like good news. Deal flow is back, buyers are active and valuations are stabilising.

But what those numbers don’t tell you is more deals are closing but fewer are landing the way founders expected.

I’ve noticed a clear gap between deal success on paper and outcome satisfaction in reality. It often looks like this: the transaction completes, the press release goes out and six months later, the founder is sitting with a feeling they can’t quite name.

Was the deal wrong? No. It just wasn’t what they thought it would be.

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The Numbers Look Better Than the Outcomes

 

Valuations have become more disciplined, that’s true. But what’s also true is that deal structures have become far more complex.

In 2024, more than 50% of M&A transactions involved a deferred price component. Of those deals with deferred payments, 72% included earn-outs, forcing founders to stay tethered to the business to receive their full valuation.

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This is a fundamental change in how exits work.

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Five years ago, a founder could walk away on day one with the majority of their proceeds in hand. Today, that’s increasingly rare. Most mid-market deals now involve some combination of:

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• Earn-outs tied to future performance

• Equity rollovers that keep you invested

• Deferred consideration spread over multiple years

 

The headline valuation looks good but the cash at close is often significantly less than founders assume.

 

The part that catches people off guard IS the structure of the deal is usually decided long before lawyers get involved.

 

By the time you’re negotiating terms, the buyer has already formed an opinion about:

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• The risk in your business

• Your role post-close

• How much of the valuation they’re willing to guarantee upfront

 

If you’re not shaping that conversation early, you’re reacting to decisions that have already been made.

I’ve seen this pattern repeatedly. A founder enters negotiations excited about a strong valuation, only to realise later that most of it is contingent on performance metrics they don’t fully control, or tied to their continued involvement in a business they thought they were leaving.

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The deal closes AND valuation looks impressive but the outcome feels nothing like freedom.

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The Silent Risk No One Models

 

There’s a category of risk that doesn’t appear in any due diligence report. It’s neither financial nor legal but ends up being one of the strongest predictors of founder regret.

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Culture loss, authority dilution, identity shift.

 

These are the things that change the day after the deal closes.

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• You’re no longer the person who makes the final call

• The team you built now reports to someone else

• The culture you spent years shaping begins to drift

• The identity you held as “the founder” starts to blur

 

There’s no spreadsheet that captures this but buyers often anticipate it.

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They know that post-close integration is messy and that founders struggle with the transition. And they structure deals accordingly, with earn-outs and retention clauses designed to keep you engaged even when your authority has shifted.

Only 20% of post-exit entrepreneurs allocate time to planning their “life after business” before the deal closes, leading to the “identity void” that drives post-deal dissatisfaction.

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This is the silent risk. The one that shows up six months after close, when the money is in the bank but something still feels off.

I’ve sat across from founders who thought selling their business would feel like relief. Instead, it felt like a loss. Because they hadn’t prepared for what comes after.

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The transition is deeply personal. And if you don’t address that before the deal closes, the buyer will make assumptions about how you’ll handle it, and those assumptions will shape the terms you’re offered.

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What Has Changed in Today’s M&A Market

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The market has shifted in ways that favour buyers more than most founders realise.

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Capital is more expensive and tolerance for ambiguity is lower.

 

Buyers are more patient and selective as they’re not chasing deals the way they were in 2021. Now., they’re waiting for the right fit, right price, and the right structure.

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This shifts leverage earlier in the process, often before founders realise it.

 

Here’s what that looks like in practice: a buyer expresses interest and the founder assumes they’re now in a position of strength.

 

But the buyer is already:

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• Assessing risk

• Questioning assumptions

• Forming opinions about what the business is worth

• Deciding what safeguards they’ll need

 

By the time you reach the term sheet stage, much of the negotiation has already happened. The buyer has decided how much risk they’re willing to take, and the deal structure reflects that.

 

If you’re not managing perception from the first conversation, you’re giving up control without knowing it.

Founders lose negotiating power not because their business wasn’t strong but because they didn’t recognise how early the buyer was forming their view. They treated the initial meetings as exploratory. The buyer treated them as diligence.

The market has also become less forgiving of gaps. If your financials are inconsistent, your client concentration is high, or if your leadership team is thin, buyers will price that in aggressively. They’re simply looking for reasons to discount.

So, yes, deals aren’t happening but the terms reflect a market where buyers have time, capital discipline, and options.

 

What This Means for Founders

 

Before you ask yourself, “Can I sell my business?” Think “Do I understand what I’m actually selling, and what I’m keeping?”

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Because in most mid-market deals today, you’re not walking away clean. You’re staying involved in some capacity, whether that’s through:

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• An earn-out that ties you to performance targets

• A consulting agreement that keeps you engaged

• An equity rollover that maintains your investment risk

 

You’re also keeping the emotional weight (the relationships, responsibility, identity) of the business, even if the ownership has transferred.

 

If you haven’t thought through what that looks like, the deal will define it for you. It’s why the most valuable work in an exit happens before the deal looks real.

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It happens when you’re:

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• Clarifying what success actually means for you (not just financially, but personally)

• Building the business in a way that reduces buyer risk, so you’re negotiating from strength

• Addressing the emotional and identity transition before a buyer asks you to stay on for three years

 

Most founders wait until a buyer shows up to think about this. By then, it’s too late to change the structure. You’re reacting to terms that reflect how the buyer sees you, not how you see yourself.

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The deals that work, the ones where founders look back without regret, are the ones where this work happened early. Where the founder understood what they were building towards, not just what they were building.

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The Market is Active

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Deals are closing but closing a deal and achieving the outcome you want are not the same thing.

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If you’re thinking about an exit, the question is whether you’re prepared for what happens after they say yes.

What do you wish you’d known before entering your exit process? Or if you’re planning one, what’s the part that feels hardest to prepare for?