What SMBash 2026 Taught Us About Buying a Business in a Harder Market

SMBash 2026 in Dallas drew a few hundred searchers, brokers, lenders, and operators. Across five sessions - Jacob Hall, Peter Lehrman, Athena Simpson, and the SBA panel - one argument kept showing up in different forms: the ETA market has changed more in the last three years than in the prior decade. The playbook most searchers are running was written for a world that no longer exists. The searchers who close deals from here are the ones who can adapt to it fast.

These are my field notes on what changed and why.

1. The market has changed (Jacob Hall, Kando Capital)#

Jacob Hall of Kando Capital opened with the line that framed much of what followed: "The playbook we're running today is largely written in 2019, 2020, and 2021. And the world those years were built on just doesn't exist anymore."

Then he picked apart three things searchers tell themselves.

The first is the "3 million baby boomer businesses" myth. It's a real number on paper. It is not a real deal pool. Once you screen for size, profitability, salability, and an owner who actually wants to sell, the addressable pool is closer to 350,000. The supply story is much smaller than the pitch suggests.

The second is the assumption that the buy side is wide open. It isn't. MBA programs now run dedicated entrepreneurship through acquisition (ETA) clubs with active alumni networks. PE has been moving downmarket for years. Family offices are doing direct deals. Independent sponsors are everywhere. The long tail on the buy side has gotten thick, and you're competing with all of it for the small pool that's actually for sale.

The third is the financial model. Hall called out the four failure modes he sees on repeat. He calls them the Four Horsemen of ETA Failure: max leverage, overpaying, hockey-stick growth assumptions, and going it alone. None of those are stupid in isolation. They're smart people running a 2019 playbook in 2026. Cheap capital, multiple expansion, and cooperative sellers aren't in the base case anymore. His phrase: "Don't mistake the possible for the probable."

His self-assessment for the room: have you actually managed people, or coordinated activity? Have you laid someone off and tried to sleep that night? Have you told a customer something they didn't want to hear and kept them? Have you run a quarter where revenue was down and figured out what to do? If the answers are mostly no, get operating experience before betting the house.

2. The Buyer of Choice imperative (Peter Lehrman, Axial)#

Peter Lehrman, CEO of Axial, focused on a different layer. Hall's argument was about the deal. Lehrman's was about access.

He framed deal sourcing as a 101-to-201 progression. 101 is finding deals. Cold outbound, high volume, broad nets. 201 is being invited to the deals you actually want. The phrase he kept coming back to was "Buyer of Choice."

The data Axial brought to the room is hard to argue with.

Only 35% of broker-posted transactions on Axial get sent to 100% of the recommended buyer list. The rest, the majority, are private or selective. The broker winnows before the buyer ever sees the listing. If your profile doesn't clear the broker's bar, you don't get the email.

Roughly 80% of buyers who actually close transactions on the Axial platform have an online narrative Axial classifies as good or great. Not perfect. Just legible enough to survive a thirty-second broker skim.

Customized seller outreach beats generic outreach by 20 to 25% on response rate. Templates lose. Specificity wins. In one example Lehrman shared, a winning letter of intent (LOI) from a former Bain consultant against seventeen other bidders led with the founders' names and noted that "even your competitors respect you, often walking into your trade show booth to admire your products and greet you personally." That sentence didn't come from a template. The buyer had been to the booth.

Lehrman's contrarian nudge was about positioning. The default ETA pitch, recurring revenue, fragmented markets, low concentration, industry-agnostic, is unmemorable to a broker. Bill d'Alessandro buys pet brands. Sam Rosati bought fencing. Kyle Tucker bought a pizza business. Narrow is how brokers remember you. Narrow is how content compounds. Narrow is how you become the first call in a category instead of a tourist in ten of them.

His closing line, "In a world full of AI and spamming shortcuts, focus, authenticity, and hard work will still pay off," landed differently in 2026 than it would have a year ago.

3. Speed and fit over volume (Athena Simpson, Acquimatch)#

Athena Simpson approached the same problem from the funnel side. Her sessions are dense with numbers, and the numbers are uncomfortable.

Her client data, on real deals her team is working: to get one closed acquisition, you typically need to scan around 30,000 listings, generate 1,300 matches, sign 650 NDAs, seriously review 300, have 81 substantive conversations, send 9 to 14 LOIs, and sign 2 to 3 of those LOIs. The funnel is wider than most first-time searchers expect. The timeline is longer too. Her numbers: 12 to 18 months solo to a signed LOI is realistic. Three to six months is fantasy.

Inside that funnel, the single biggest factor she sees in winning competitive deals is speed. Specifically, days from NDA to LOI. Winning offers and losing offers are separated by about five days on average. Most buyers take two to four weeks from seeing a deal to a broker call. That's too slow. And contrary to a lot of advice circulating in the community, winning offers average 10% over asking, not under. Speed and confidence are signals to brokers. Slow and aggressive is a signal that you can't close.

The other half of her talk was about fit. She ran the room through a quick exercise: write down your deal box. Almost every first-timer has the same one. $500K-plus seller's discretionary earnings (SDE), recurring revenue, 5+ years operating, owner out of day-to-day, stable industry. Her line: "Are you all exactly the same person?"

The implication is that the standard deal box is a losing strategy. You're chasing a tiny supply of high-quality businesses against PE, strategics, repeat buyers, and professional search teams, with the same criteria they have. Her fix is to flip the exercise. Eliminate your hard nos, stay industry-agnostic, and match your superpower to a business you'd actually be good at running. Her closing: "All you need to commit to is becoming the right buyer and the right owner at the same time."

4. The lending reality in 2026 (SBA panel)#

The SBA panel - Jared Johnson of First Internet Bank, Matt Dolsky of Byline Bank, and Matthias Smith of Pioneer Capital Advisory - was the most concrete session of the conference.

Two policy changes are reshaping the lending environment this year. US citizenship is now required for all owners of an SBA-financed business. Green card holders are no longer eligible.¹ Seller equity rollover has been eliminated unless it's structured as retained equity with a two-year personal guarantee. Both rules tightened a market that was already tighter on credit.

On seller note structure, the panel's optimal looks like this: a 2-year full standby, 8-year amortization, year-4 balloon, with an SBA Form 155 subordination agreement on file. Notes that pay too fast (under six years) face lender pushback. For deals with customer concentration above 30 to 40%, panelists suggested forgivable seller notes tied to customer retention as a creative risk-share.

The bigger structural point: conventional lending still can't replace SBA for sub-$5M deals. There's no real 10-year amortization product outside SBA at that size. Local banks and credit unions only step in for asset-heavy businesses with deposits attached. SBIC and private credit don't show up until you're past $2M earnings before interest, taxes, depreciation, and amortization (EBITDA). For most searchers, SBA isn't a default choice. It's the only lending product that mathematically works.

What stuck with me most was Matt Dolsky's line about credit committee. "When I go to credit committee, I spend way more time talking about the subjective things than I do talking about cash flow. When we miss, it's because you made a bet on the wrong person, or the seller pulled the wool over everyone's eyes." Cash flow is the floor. Character is the deciding variable.

The whole panel reinforced engaging lenders pre-LOI, choosing cash flow lenders over collateral lenders, and asking any lender directly: "How often do you issue a term sheet and then not follow through, and why?" That question reorders most lender conversations in a useful way.

For background on the citizenship rule and how lenders are interpreting it, see SBA Notice 5000-872050 on citizenship and residency requirements. For broader lender criteria, see what SBA lenders actually look for.

5. Trust is the deal#

If there was one through-line across the whole conference, it was this. Said differently in every session, but the shape was the same.

Hall closed his keynote with a story about his grandmother buying the Pueblo Motel in 1970. Single mother. High school diploma. No institutional lender, no quality of earnings (QoE), no EBITDA discussion. Just months of seller relationship-building before price ever came up. His framing: "EQ isn't a complement to IQ. It dwarfs it. People fund people. Sellers sell to people." Sellers in this asset class aren't institutional counterparties. They're owners in their sixties and seventies whose identity is tied up in a business they built, and they sell to the buyer they trust, not the highest bidder.

Lehrman said the same thing in a different language. Brokers vet buyers because brokers are paid to close, not to entertain inquiries. Their reputation rides on every introduction they make. Reputation is the scarce resource. Online narrative is how trust becomes legible at scale, before any phone call happens.

The American Operator session put it more bluntly. Sellers are looking for "someone who reminds them of their son or daughter." That isn't a metaphor. They're going to stay in town after the deal closes. They'll see you at church on Sunday and at the grocery store on Tuesday. They want to know that nobody is going to say "this business sucks now" within earshot of them.

The pattern: across the conference, trust did the work that financial engineering used to do.

What this means going forward#

The harder market doesn't punish people who care about the work. It punishes people running 2021's playbook in 2026.

The searchers who win from here look like this. They've gotten narrow on a thesis brokers can remember. They've built an online narrative that survives a thirty-second skim. They move quickly between NDA and LOI. They engage lenders pre-LOI. They aren't running a financial engineering exercise. They're running a relationship business with a financial engineering tail.

The infrastructure layer is finally catching up. Verified buyer programs, structured reviews of deal-team providers, and reputation databases are starting to do at scale what tribal knowledge and dinner conversations did one handshake at a time. That's the layer worth watching, and the layer worth participating in. Trust shouldn't have to be rediscovered every deal.

If you're between deals or actively searching, the cheapest edge available right now is an honest audit. Of your LinkedIn. Of your thesis. Of your operating experience. Of your deal team. SMBash 2026 was an argument that the people who do that audit are the ones still standing in a few years, and that the ones who skip it are the zombie deals nobody writes about.

Sources#

Footnotes#

1. U.S. Small Business Administration, SBA Notice 5000-872050: Citizenship and Residency Requirements, 2025. ↩