Financing isn't breaking deals. Forecast quality is.
Notes from a private M&A roundtable: two PE bankers, one investor, one CEO — and one universal diligence pattern.
Last month I hosted a private roundtable on what's actually moving M&A in GovCon, Defense, and Cyber. The room: two PE bankers, one investor, and one CEO. The sector was specific; the diligence patterns were universal.
Buyers are back, but selective — deploying with intention, with differentiation and growth as the price of entry, not scale for its own sake. The shift from services to solutions is structural and rewarded with margin: outcomes and IP over butts in seats. Solid debt terms are still available for quality companies and the banks are hungry. Financing isn't breaking deals anymore.
What is breaking deals is forecast timing — the number-one deal-killer for fast-growing businesses with lumpy revenue. Below $50M in revenue, founder dependency surfaces and buyers ask who walks the halls. AI adoption is uneven, and governance is now a board-level topic. The mood has shifted from defensive to optimistic: companies that adapt are deploying capital, winning contracts, and clearing diligence. The ones still selling growth potential are sitting on the bench.
The bottleneck is no longer capital. It's the quality of the performance behind the story. Financing isn't breaking deals. Forecast quality is.