The New Rules for Selling Your Business

**Chris Younger** (0:00)
We've seen more so than anytime in my career, a number of smaller PE funds basically opt not to raise more money. They're basically shutting down or they're kind of finished.
And it's hard to tell, but like I said, I've never seen that in my career. It's always been, we've added more PE firms, but it does feel like, again, and maybe it's a small sample size, but we've seen a number of firms just let us know, hey, this is our last fund. The variance between low bid and high bid in the private markets can be two or three times.

**Jacob Oros** (0:37)
Welcome to M&A Talk, the number one podcast on selling a business brought to you by Morgan & Westfield, a boutique M&A firm specializing in the sale of small to mid-sized companies. I'm your host and president of Morgan & Westfield, Jacob Oros. If you're considering selling your business and you'd like to work with me throughout the process, you can schedule a free consultation at morganandwestfield.com. Or if you'd like my team and I to perform evaluation of your company for a one-time fee of $1,500, visit morganandwestfield.com or see the link in the show notes.
Today, we're going to talk with Chris Younger of Class 6 Partners in Denver, Colorado. He's an investment banker.
We're going to talk about the long-term impact of factors that might affect the sale of your company. It could be AI, geopolitical factors, economic factors, and so forth. We're going to talk not only about some specific current events, but also in general how these events can impact the M&A market's inability to sell your company. Chris, welcome back to the show.

**Chris Younger** (1:44)
Well, thanks so much, Jacob. Good to see you.

**Jacob Oros** (1:47)
Let's talk in general, what are some of the topics of 2026? Obviously, of course, AI. What are some of the other topics that you think are front of mind here in terms of the markets?

**Chris Younger** (1:57)
Obviously, as you mentioned, AI and its impact on different businesses, lots of unknowns there. I think the political environment, what are we going to see in the midterm elections? What impact does that have? Geopolitically, we have lots of things going on, Venezuela, Iran, etc.
And then, the overall thesis around private equity, there's been some noise around the private credit markets and volatility, particularly as it relates to lending into software businesses. And that goes back to the impact of AI. For private equity, there's not been a lot of exits. And so you have funds that are starting to get pretty long in terms of hold periods for businesses. And given that, what does that do both to fundraising, to the exit volumes in 2026, as well as to appetite for future deals?

**Jacob Oros** (3:05)
Let's actually back up and ask the very important timeless question here, which is, to what extent do short-term events like this impact the M&A markets and the buy and sell side?

**Chris Younger** (3:19)
I'll give you an example right with the tariffs that we had earlier in 2025
Clearly, unlike the public markets where you'll get immediate reactions, which can be both positive and negative, but over time tend to roughly even out. In the private markets, typically what you'll get is less price volatility and more inaction. People want to wait and see.

**Jacob Oros** (3:47)
To sit on the sidelines?

**Chris Younger** (3:49)
Exactly.

**Jacob Oros** (3:49)
Wait it out?

**Chris Younger** (3:50)
Yeah. What's going to be the impact of tariffs on? Is that going to be borne by the customer? Is it going to be borne by the retailer? Is it going to be borne by the manufacturers?
What are the... How's that all going to play out? So when the tariffs happened, any business that had overseas product manufacturing and exposure, those deals were put on hold until the buyers could figure out, what's the impact of this going to be on these businesses? So when you get that kind of volatility, it tends to be very vertical specific.
But again, their typical reaction is not, we're going to immediately reprice like you see in public markets. Typically, the reaction is, hey, we're going to wait and see.

**Jacob Oros** (4:37)
Is that due to the nature of the market and the fact that it's inefficient and the illiquidity?

**Chris Younger** (4:42)
For sure, right? And transactions, to really get to ultimate valuation, transactions take time to execute. And so a typical deal from soup to nuts might take six to nine months to get through it. And if you're in diligence, maybe 45 to 60 days. And so buyers and sellers have time to reflect on what's the impact going to mean and how should this impact my thoughts on valuation?