TL;DR

• Selling a small business is slow, manual, and structurally broken.
• AI-native platforms can compress timelines, lower costs, and rebuild SMB M&A by automating discovery, preparation, and diligence.

You’ve spent 30 years running a family HVAC business in Kansas. You know your customers by name, your kids grew up sweeping the shop floor, and you’ve finally decided it’s time to retire.

But when you start exploring how to sell, you’re hit with a flood of noise. Your inbox fills with hundreds of emails from “private equity firms” and “strategic buyers” who claim they’re interested in your business, but it’s impossible to tell who’s legitimate. If you’re like most owners, you try to sell on your own first. Quickly, frustration sets in: months of wasted time, endless calls, and no real progress.

When you turn to a broker, the experience often isn’t much better. You get someone who feels more like a real estate agent than a financial advisor, charging large upfront fees and offering little transparency or support. Meanwhile, investment banks have long solved this problem for the Fortune 500, but they rarely touch the types of businesses that actually make up America. Nearly 45% of U.S. GDP runs on small businesses, yet this asset class remains non-institutionalized due to structural reasons.

A Market Hidden in Plain Sight

When I worked in investment banking, I saw firsthand how the model was built. Deals were bespoke, expensive, and endlessly manual. As a junior banker, I spent nights buried in spreadsheets, redlines, and diligence checklists. That machinery works for a $200m software company. But apply it to a $3m local business, and the gears grind to a halt. The math collapses.

That mismatch leaves a massive gap that is more than a nuisance. It leaves millions of small business owners without a real path to exit and buyers without an efficient way to find them.

Small businesses make up 99.9% of U.S. firms and employ nearly half the private workforce. We’re entering a historic ownership transition: over the next 10 years, roughly three-quarters of business owners plan to exit, putting an estimated $10 trillion in wealth into motion. Yet despite this looming transition wave, over 60% of family-owned businesses have no documented succession plan at all.

What’s left is a fragmented system: overwhelmed sellers, disorganized intermediaries, and buyers who can’t efficiently identify quality opportunities. The result isn’t just inefficiency; it’s a structural failure that locks up trillions in enterprise value.

A Perfect Storm of Supply, Demand, and Capability
Three powerful forces are colliding at once to unlock this overlooked market.

First, there is a record supply of businesses that are ready to be sold, driven by generational turnover in ownership.

Second, there is a growing class of modern acquirers, from search funds and solo capitalists to family offices, all actively seeking deal flow. At the same time, private equity is moving aggressively down-market, as returns in larger deals have compressed and rates remain elevated, smaller acquisitions have become one of the most attractive paths to generate alpha.

Third, new technical capabilities make it possible to automate previously manual workflows, match buyers and sellers with precision, and compress time-to-close without hiring armies of analysts.

What was once too manual, too slow, and too expensive can now be reimagined as agentic infrastructure. This is not incremental tooling. It is a first principles redesign of the investment banking model.

An AI-Native Model for SMB M&A

The most important companies in this space will be those that vertically integrate the transaction process and serve both buyers and sellers through a software-first platform.

These platforms will accelerate transactions by automating tasks like CIM generation, buyer targeting, Q&A workflows, and diligence prep. They will improve match quality by using structured data, intent signals, and buyer-seller profiling to pair the right parties together. They will expand access by lowering fees, offering intuitive onboarding, and enabling asynchronous workflows, so even smaller businesses can get professional-grade support while buyers gain structured, qualified opportunities.

What We Believe

To back this market, we hold a few core convictions.

The M&A stack for small businesses needs a complete rebuild. Legacy systems and broker networks were never designed for this segment. New platforms must rethink the entire experience – from first outreach to final close – through software rather than headcount.

Workflow will beat headcount. The next generation of advisory will not rely on junior analysts. It will rely on automation, standardization, and smart infrastructure that compresses weeks of labor into minutes.

Both discovery and diligence are broken – and AI can transform them. Surfacing the right deal has always been the biggest bottleneck, but once a buyer is interested, diligence becomes its own minefield. Most SMB owners do not have clean, audit-ready data; they are running a business, not maintaining a data room. Historically, normalizing financials, preparing materials, and packaging information in a way buyers can digest simply wasn’t worth the cost.AI changes this equation. With the right infrastructure, platforms can prepare diligence materials automatically, clean messy financials, and standardize information so buyers can evaluate opportunities quickly and confidently. Discovery becomes more efficient, and diligence becomes far less painful. Whoever solves both sides of the funnel at scale will win the market.

This market is not small. It has only been hard to reach. The long tail of M&A has been underserved because it could not be profitably accessed. With the right infrastructure, it becomes one of the most dynamic segments of private markets.

We’re Still Early

We’re still in the early innings of a true end-to-end platform emerging that can efficiently navigate the high-stakes, complex process of a small business owner selling their company.

We believe a category-defining company will be built in this space: one that balances the human touch required to guide SMB owners through life-changing transactions with the power of AI-native tooling and infrastructure to finally support a previously underserved market. If you’re building one of them, that is the opportunity we are most excited about. We would love to meet you. Reach out to Tarun or Eliza.

This article is for informational purposes only and does not constitute investment advice. Views expressed represent the opinions of Jump Capital. Jump Capital may have investments in or pursue investments in the technology sectors and companies discussed. References to specific companies do not constitute investment recommendations.