When Private Equity Calls: A Founder's Guide to Unsolicited Interest

Unsolicited interest in founder-owned companies is rising, and the pattern behind it is easy to trace. United States private equity firms entered the second half of 2026 holding roughly $1.13 trillion in uncommitted capital, an all-time high, while more than 11,000 of their existing portfolio companies have now been held five years or longer. Capital that must be deployed, sitting alongside investments that are proving hard to sell, pushes buyers down market. The calls are landing on owners who never listed their companies for sale.

Why Your Phone Is Ringing

The money has to go somewhere. Dry powder, the industry's term for capital that investors have committed to funds but that has not yet been spent, has nearly doubled over the past five years. Fund managers collect fees on that capital and face contractual deadlines to invest it, so a record stockpile creates its own deployment pressure regardless of market conditions.

At the same time, the big end of the market has turned selective. First-half 2026 data shows sponsor deal volume down by roughly a third from a year earlier even as average deal size rose sharply, meaning firms are concentrating their capital in fewer, higher-conviction bets. In the second quarter, strategic corporate acquirers increased their activity by 31 percent quarter over quarter while sponsor deal value slipped 9 percent. When competition at the top gets expensive, financial buyers hunt where entry prices are lower.

That hunt leads to the lower middle market, generally companies worth between $25 million and $100 million. This band has quietly been one of the better-performing segments in private equity, and midyear outlooks from lenders and advisors consistently flag it as the area to watch for the rest of 2026. Purchase prices are lower, competition is thinner, and the supply of founder-led businesses is deep. The practical result for owners is more sourcing teams, more letters, and more calls that open with a phrase like "we are building a thesis in your industry."

An Inquiry Is Not an Offer

Not all inbound interest is equal, and sorting it correctly is the first piece of leverage an owner has. Most outreach is broad canvassing: junior deal professionals contacting hundreds of companies that fit a size and sector screen. Some is thesis-driven, where the firm has studied your niche, owns adjacent businesses, and can explain specifically why yours fits. A true preemptive offer, with a number attached and a willingness to move quickly, is rare.

Understanding what the caller wants helps explain the choreography. The near-term goals are usually your financial statements, a meeting, and, as soon as possible, exclusivity. A deal negotiated without competing bidders is known as a proprietary deal, and it is the least expensive way for a buyer to acquire a company. Buyers pursue proprietary conversations precisely because prices in competitive processes run higher.

Owners should also treat early numbers with caution. A caller who says the firm "typically pays eight to ten times earnings" has not made an offer. That figure is an anchor for negotiations that will not begin in earnest until after due diligence, and diligence outcomes tend to track leverage. A buyer who knows no one else is at the table has little reason to resolve open questions in the seller's favor.

How Buyers Price a Founder-Led Business

Middle-market buyout pricing has been stable, with purchase multiples holding around 7.2 to 7.5 times EBITDA, essentially flat year over year. (A multiple, or "turn," of EBITDA refers to a company's earnings before interest, taxes, depreciation, and amortization; a business earning $5 million at a 7x multiple implies a $35 million enterprise value.) Roughly a quarter of M&A advisors surveyed expect multiples to firm further in 2026, which is one more reason buyers want to lock in conversations now.

The average, though, conceals a wide range, and the spread is driven by business quality rather than by negotiating theatrics. Market data shows companies with predominantly recurring or contractual revenue commanding premiums of one and a half to two and a half turns of EBITDA over comparable project-based businesses. Customer concentration cuts the other way: advisors consistently report that businesses where no customer exceeds roughly 20 percent of revenue draw materially stronger offers than those dependent on one or two accounts. Management depth, clean financial records, and documented processes each move the number as well.

The most common discount applied to founder-led companies is owner dependence. If key customer relationships, pricing decisions, and daily operations all run through one person, buyers see risk that walks out the door at closing. They respond by lowering price or by restructuring the deal so the owner stays economically tied to results, through an earnout (purchase price contingent on future performance) or required rollover equity (retaining a stake in the business after sale).

Buyers will also commission a quality of earnings analysis, an accounting review that stress-tests reported profits to separate sustainable earnings from one-time gains. Sellers who have never seen their own numbers through that lens are negotiating over a figure the buyer understands better than they do.

Responding Without Losing Leverage

The first conversations matter more than most owners expect, because information given away early cannot be retrieved. The goal is not to shut the door. Inbound interest is free market intelligence, and a serious approach can be the start of an excellent outcome. The goal is to engage on your timeline rather than the buyer's.

What to Watch Through Year End

The pressure behind the calls is structural, so expect the volume to continue. Dry powder does not spend itself, and the backlog of long-held portfolio companies will take years to clear, which keeps sponsors motivated both to buy new platforms and to add smaller acquisitions onto existing ones. Financing conditions remain workable, and if borrowing costs ease further, the math supporting higher multiples improves.

The character of outreach is also changing. Sponsor coverage of founder-led companies has become more polished, with firms leading on operating resources, industry expertise, and continuity for employees rather than price alone. That is a rational response to a market where owners have choices, and it is worth taking seriously. It also means the surface of an approach reveals less about the economics underneath, which makes independent advice more valuable, not less.