My Profitable Company Is Worthless to Investors - Here's Why That Works in My Favor | Entrepreneur

"Over the past few months, I've received a surprising number of emails and even phone calls from private equity firms asking if I'd consider selling my business. "Gene," they all say, "we've followed your growth in the technology space and believe we can help you unlock value while preserving your legacy and team. Would you be open to a 20-minute call to discuss mutual opportunities?""

"It's flattering, sure. And it makes sense. According to Harvard's Corporate Governance site, private equity exits jumped from $754 billion in 2023 to $902 billion in 2024 - about a 20% increase. Other reports show deal value rising by 50% in the first half of 2024 alone, with strategic acquisitions leading the way. Private equity is everywhere - scooping up contractors, manufacturers, distributors and yes, even tech companies like mine."

"Why? Because many business owners are aging out. The average small business owner in the U.S. is over 55, according to the Small Business Administration - and that was back in 2020. So a wave of exits is underway, and investors are eager to buy businesses with strong financials, recurring revenue and growth potential. But my business? I don't think I'm sellable. Not because I wouldn't entertain an offer - but because once a buyer looks under the hood, they'll realize the uncomfortable truth:"

Several private equity firms have reached out to explore acquisition opportunities amid rising deal activity. Private equity exits increased from $754 billion in 2023 to $902 billion in 2024, with deal value rising substantially in early 2024. Many small business owners are over 55, producing a wave of exits and investor appetite for companies with strong financials and recurring revenue. The business described lacks hard assets such as buildings or equipment and mainly holds cash and accounts receivable. Most payables are prepaid client deposits that boost cash flow but create liabilities a buyer must honor, reducing apparent sellable value.

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