The Resilient Engine of the M&A Market and the Rise of Gen X Entrepreneurs
As we look ahead to the second half of 2025, one thing is clear: the M&A market isn’t cooling—it’s evolving. While headlines often spotlight mega-deals and Wall Street drama, the real momentum is playing out in the lower middle market, where grounded, real-world businesses are driving resilient activity.
This segment — typically comprised of businesses valued between $1 million and $25 million — continues to demonstrate strength, adaptability and stable deal flow, even in the face of broader economic uncertainty.
According to the Q1 2025 Market Pulse Report, while deal multiples have softened slightly from their pandemic-era highs, they remain historically solid across key sectors such as construction, consumer products, healthcare, and B2B services. Lower to middle market businesses tend to be owner-operated, service-driven and grounded in real-world demand — plumbing companies, specialty manufacturers, logistics firms, inspection services, consumer brands and more. These businesses provide essential services and local employment — and buyers recognize their staying power.
Even with modest declines in multiples in Q1, valuations remain strong and there’s a steady pool of private equity groups targeting platforms in this range. Increasingly, it’s Generation X fueling the momentum, not just the expected Baby Boomers who are retiring.
Gen X: Buying Careers, Not Just Businesses
There’s a shift underway in how people think about ownership. For Gen X, many of whom are now in their 40s and 50s, the idea of buying a business isn’t just a financial decision — it’s personal. After decades in corporate roles or multiple career pivots, many Gen Xers are searching for something more meaningful: control, flexibility, and purpose. They’re acquiring companies, not just to generate income, but to create a better lifestyle and a more fulfilling professional life.
Rather than building something from scratch, many are pursuing Entrepreneurship Through Acquisition (ETA), where they purchase established, profitable companies to take over and grow. They want to walk into something turnkey, but with room to grow. And they bring fresh perspective: they are digital-savvy, strategic and highly motivated to elevate legacy businesses into the next stage of success.
For Gen Xers, ETA offers immediate ownership, recurring revenue, and operational infrastructure, without the time or risk associated with starting from zero. For those who are seeking flexibility, control and long-term wealth creation, it’s the perfect blend of security and autonomy.
ETA is especially attractive in this market because of:
· Lower multiples compared to larger deals
· Available SBA financing with favorable terms
· Sellers willing to stay on for transition and training
· A growing community of professionals choosing ownership over employment
Data backs this up: Guidant Financials’ 2024 Small Business Trends report found that 49% of small business owners are now Gen X, up 6% from the previous year. Many are buying businesses to replace or elevate corporate income with more meaningful, balanced work.
Some of the biggest drivers of activity in this space are strategic and lifestyle-focused buyers. Private equity remains active, particularly in roll-up strategies, but we’re also seeing growing interest from highly skilled Gen X professionals looking to take control of their futures through acquisition
At the Same Time: Gen X Is Selling Too
While many Gen Xers are buying businesses, another wave is preparing to exit. For many owners, the motivation is personal — not burnout, but a desire to pivot. Some want more family time. Others want to travel, write a book, start something new or simply enjoy the fruits of years of hard work.
Nearly half of U.S. small businesses are owned by Gen X, and they’re now hitting the stage where liquidity events make sense. As one recent seller told me, “I love my business, but I also want to enjoy life while I’m healthy and energized. I can always start something else if I miss the work.”
This isn’t surprising—Gen X is often a generation of serial entrepreneurs. A report by Coutts found that 53% of serial entrepreneurs plan to exit their current business within five years, compared to only 32% of first-time founders. They're confident, experienced, and motivated by more than just money — they want legacy, lifestyle and new chapters.
So, What Does This Mean for Business Owners?
It means now is a smart time to assess your options — whether you’re thinking about selling, buying, or both.
There is real movement happening in the market. Buyers are out there. Private equity is active. For sellers, preparation is key. From cleaning up financials to identifying addbacks and addressing operational red flags, small shifts can yield big results. Working with a professional M&A advisor ensures that you’re not just listing your business—but positioning it to attract the right buyer at the right price.
And for buyers — especially those leaving the corporate world — acquiring a business is often the fastest path to freedom and financial control.
Bottom Line: The Opportunity Is Now
If you’re a business owner, whether you’re looking to exit and enjoy your next chapter, or acquire and start a new one, the key is being informed, prepared and strategic.
Let’s talk about where you are in your journey — and how I can help you get to where you want to be. Get in touch for a confidential consultation.