The phone has been vibrating against the mahogany desk for exactly 18 minutes, a rhythmic buzzing that feels like a hornet trapped in a glass jar. This is the 8th call today. Not from a customer, not from a supplier, but from a 28-year-old associate at a freshly minted private equity firm in Manhattan who likely couldn’t tell the difference between a lathe and a lawnmower. He’s calling because my client’s sales are up 48% year-over-year, and the market is, by all accounts, screaming. The sky is blue, the multiples are at record highs of 6.8 or 7.8 times EBITDA, and every headline suggests that now-right now-is the time to cash out. But the more he talks about ‘synergistic opportunities’ and ‘platform scaling,’ the more my stomach tightens into a knot that even a 18-year-old scotch couldn’t loosen.
There is a specific, suffocating kind of pressure that comes with a ‘good’ economy. It is the pressure to conform to the frenzy. I remember explaining the internet to my grandmother last week-trying to describe how data packets move through the air like invisible birds-and she looked at me with this profound, quiet skepticism. She didn’t care about the speed; she cared about the reliability. She didn’t want the bird to be fast; she wanted to know where it slept at night. Selling a business in a booming market feels a lot like that conversation. You are surrounded by people obsessed with the ‘speed’ of the market, the velocity of capital, and the height of the numbers, but very few people are looking at where the bird is going to sleep. They are ignoring the structural integrity of the deals because the weather is too nice to worry about the roof.
1. The Jungle Gym Metaphor: Hiding Flaws in Heat
My friend Bailey N., a playground safety inspector by trade and a philosopher by accident, once told me that the most dangerous time to inspect a jungle gym is a sunny Tuesday in July. When the sun is out and the kids are laughing, the heat causes the metal to expand. It tightens the joints. It hides the rattles. You think the structure is sound because it’s under tension from the heat, but the moment the temperature drops 28 degrees, the gaps reappear. The rust shows its teeth.
A booming economy is that sunny Tuesday. It masks the fundamental flaws in the buyers who are flooding the gates. It creates an environment where ‘dumb money’-capital with no expertise, no patience, and no soul-is the loudest voice in the room.
The Due Diligence Dead End
When the economy is hot, everyone is a genius. This is the core frustration I see with founders who have built something of actual substance over 28 years. They are suddenly being courted by people who think a business is just a spreadsheet with a pulse. These buyers are often backed by funds that have to deploy capital within a strict 48-month window or lose their management fees. They aren’t looking for a legacy to protect; they are looking for a hole to fill in their portfolio.
This leads to the first major risk of selling in a peak: the Diligence Dead End. In a stable market, a buyer spends 68 days really getting to know your operation. In a ‘hot’ market, they send a fleet of 18 junior analysts to perform ‘accelerated’ due diligence. They don’t look at the culture. They don’t look at the 88% retention rate of your middle management. They look for reasons to re-trade the price the moment they find a single scuffed baseboard. They waste your time because they have too much money and too little wisdom.
[The moment of maximum optimism is the moment of maximum risk.]
3. Finding the Steward: Cooling Markets Attract Operators
A stable, or even a slightly cooling market, is actually a better environment for a serious seller who cares about the survival of their life’s work. When the ‘dumb money’ retreats to the sidelines to lick its wounds, the only people left are the ‘strategics’ and the sophisticated operators. These are the people who understand that a business is a living organism. They don’t care about the 8% swing in the S&P 500; they care about your proprietary manufacturing process or your 18-year relationship with your top three clients.
They are willing to pay a fair price-not a fake price-and they have the operational backbone to actually close the deal. This is where kmfbusinessadvisors thrives, navigating the transition from ‘owner-operated’ to ‘legacy-secured’ without falling for the siren song of the bubble.
The Psychological Toll of FOMO
There’s a psychological toll to selling when everyone else is buying that no one talks about. It’s the FOMO of the exit. You see your neighbor sell his mediocre HVAC company for 8 times earnings and you think, ‘My business is twice as good, I should get 10.’ But you’re comparing your reality to his highlight reel. You don’t see the 38% of his deal that is tied up in a five-year earn-out he’ll likely never see. You don’t see the clawback provisions that will haunt him for the next 88 weeks.
In a hot market, the ‘headline price’ is often a fiction designed to get you to sign the Letter of Intent. In a quieter market, the terms are cleaner. The cash at closing is higher. The sleep is better.
4. The Beautiful Lie of the Boom
I often think back to Bailey N. and his playground inspections. He told me once about a slide that looked perfect from 18 feet away. It was bright yellow, newly painted, and the kids were lining up. But when he got underneath it-into the shade where the sun couldn’t reach-he found that the main support post was only held in by two rusted bolts instead of 8. The paint was literally the only thing holding the structure together.
A booming economy is that yellow paint. It’s beautiful, it’s inviting, and it’s a total lie. It invites the wrong kind of attention. It attracts the ‘flippers’ who want to buy your business, dress it up with some new ‘paint’ (usually in the form of aggressive, unsustainable cost-cutting), and sell it to the next sucker 18 months later.
Certainty vs. Headline Price Comparison
High Risk of Re-trade / Collapse
Clean terms, Cash at Close
The Final Question: Peak or Purpose?
If you’re feeling that itch to sell just because the numbers look good on the evening news, I want you to sit in a quiet room for 58 minutes. Turn off the phone. Ignore the 8 emails from private equity associates. Ask yourself: Am I selling because I’m finished, or am I selling because I’m scared of missing a peak? If you are finished, sell to someone who respects what you’ve built, regardless of the ‘market multiple.’ If you are just chasing a peak, remember that peaks are very narrow places to stand.
There is a 98% chance that the ‘market’ everyone is talking about doesn’t actually exist for your specific, unique, messy, wonderful business. The market is an abstraction; your business is a reality. Don’t trade a reality for an abstraction just because the sun is shining.
We often presume that more options lead to better outcomes, but in my 18 years of doing this, I’ve found the opposite is true. When you have 88 buyers, you have 88 distractions. When you have 2 serious, qualified, industry-specific buyers who have survived multiple economic cycles, you have a deal. It’s the difference between a high-speed fiber-optic connection and a hand-written letter. One is faster, but the other one actually means something.
I think my grandmother was right to be skeptical of the invisible birds. Speed is a poor substitute for stability. The best time to sell isn’t when the economy is good; it’s when you have found the right steward for your legacy, and that steward is rarely found in the middle of a gold rush. They are usually the ones standing quietly in the back of the room, waiting for the noise to stop so they can finally hear what you’re saying.
