With more than $2 trillion in private equity capital seeking deals and middle-market M&A activity expected to rise, owners of successful private companies are being urged not to mistake buyer interest for market value.

TAMPA, Fla., May 28, 2026 /PRNewswire/ -- As private equity firms and strategic acquirers intensify their search for quality middle-market businesses, Edison Avenue is warning business owners that unsolicited acquisition offers may create one of the most expensive traps in the business sale process: mistaking flattery for fair market value.

"An unsolicited offer is not a valuation," said Edward Valaitis, Managing Partner of Edison Avenue and author of Exit Like a Winner. "It is one buyer's opening position, usually made before competition exists, before the business has been professionally prepared, and before the owner knows what other qualified buyers might be willing to pay."

The warning comes at a time when acquisition interest in privately held companies remains strong. S&P Global Market Intelligence reported that global private equity dry powder stood at approximately $2.184 trillion as of March 31, 2025, representing capital available for future investments and acquisitions. A Reuters report on a Citizens Financial survey found that 58% of surveyed executives expected M&A volume to increase in 2026, with private equity confidence rising sharply.

The Anchoring Effect Can Shift Millions of Dollars in Value

One of the biggest risks in an unsolicited offer is psychological. Harvard's Program on Negotiation describes anchoring bias as the tendency to give disproportionate weight to the first number introduced in a negotiation, even when that number may be arbitrary or strategically selected. In M&A, Edison Avenue says that the effect can be especially damaging because most business owners have never sold a company.

A Direct Buyer Often Wants Exclusivity Before Value Has Been Tested

The risk becomes even more significant when buyers ask for exclusivity via Letter of Intent too early. Once exclusivity is granted, the seller is typically restricted from speaking with other potential buyers while the buyer conducts diligence. That can reduce competitive pressure and increase the risk of price reductions, delayed closing timelines, or unfavorable deal terms.

Most Businesses Do Not Sell Successfully Without Preparation

The Exit Planning Institute has reported that only 20% to 30% of businesses that go to market actually sell, leaving many owners without a successful transition path.

"Selling a business is not an event. It is a process," Valaitis said. "The owner who waits until a buyer is already across the table is often reacting from a position of weakness. The owner who prepares in advance can control the narrative, qualify buyers, create competition, and protect value."

Price Is Only One Part of the Deal

A transaction that appears attractive on price may include unfavorable terms such as aggressive working capital requirements, large escrow holdbacks, extended indemnification exposure, seller financing, uncertain earnouts, restrictive employment obligations, or rollover equity risk.

"Two offers with the same purchase price can produce very different outcomes for the seller," Valaitis said. "Cash at closing, tax treatment, risk allocation, employee commitments, earnout terms, and post-closing obligations can be the difference between a successful exit and years of regret."

The Real Question: Compared to What?

Edison Avenue says the most important question for an owner is not whether the unsolicited offer seems attractive. The better question is: compared to what?

"An unsolicited offer may be real. It may even be respectable," Valaitis said. "But unless it has been tested against the market, it is incomplete information. And incomplete information is a dangerous foundation for the most important financial transaction of an owner's life." Valaitis has witnessed companies that sold for 1/7 of their true market value due to a lack of a thorough, confidential M&A process.

Unsolicited offers may be flattering, but they rarely lead to the best outcome for founders.

About Edison Avenue

Edison Avenue is a Tampa Bay-based M&A advisory firm serving privately held business owners in the lower middle market.

Edward Valaitis, Managing Partner of Edison Avenue, is a Certified Merger & Acquisition Professional and author of "Exit Like a Winner", a book written for business owners seeking to understand how to prepare for and execute a successful business exit.

For more information, visit www.EdisonAvenue.com.

Media Contact:
Edward Valaitis
800-975-2114
415375@email4pr.com

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SOURCE Edison Avenue