PL3 Virtual Roundtable Recap: Buy-Side Bias - Why Good Companies Get Ignored
- William Gladhart
- 1 day ago
- 5 min read
Roundtable Date: May 21, 2026
Summary: In this PL3 Virtual Roundtable, Bob Dunn and William Lindstrom explored how long-held buy-side assumptions around scale, reporting, integration, and risk may be preventing profitable companies from reaching institutional buyers - and how AI-enabled reporting standardization and syndicate models could fundamentally reshape what becomes “sellable” in the lower middle market.
What if the biggest barrier preventing small businesses from selling isn’t poor performance, but the market’s definition of what qualifies as “investable”?
That question was the central theme of PL3’s latest Virtual Roundtable, Buy-Side Bias - Why Good Companies Get Ignored, featuring Bob Dunn, Chief Product Officer at ACG and leader of GF Data, alongside William Lindstrom, CEO of The Culture Think Tank and a researcher focused on leadership, valuation, and the Micro Cap Market.
The discussion explored a growing problem across the lower-middle market:
Many profitable, operationally healthy businesses fail to transact not because they lack value, but because they fail to align with the assumptions buyers use to evaluate risk, scale, and efficiency.
As host Will Gladhart framed early in the discussion, the market has spent decades operating under a familiar set of assumptions:
Small companies are too risky
Roll-ups are painful and take years
Businesses must fully merge operations before becoming investable
Everyone must use the same systems
Founders must give up independence
And unless a company reaches a certain EBITDA size, institutional buyers don't care.
The roundtable's focused discussion challenged whether many of those assumptions still hold true today.
Session Highlights
Why 80% of small businesses never transact
The difference between operational quality and market structure
Why scale matters in private equity transactions
The historical origin of roll-up complexity
The “ERP myth” and why buyers really want standardized data
How AI-enabled reporting normalization changes diligence economics
Why founders resist traditional consolidation structures
The difference between the business broker and the investment banking markets
Why syndicate models may form faster than traditional roll-ups
How institutional buyers may begin viewing coordinated syndicates as new deal flow.
One of the dominant themes throughout the conversation was that “too small to sell” is often not a commentary on business quality - it is a reflection of transaction economics.
Bob Dunn explained that institutional buyers operate under intense pressure to deploy capital efficiently within compressed timelines.
For private equity firms, diligence on a $1 million EBITDA business can require the same amount of work as diligence on a much larger transaction. As a result, smaller companies are frequently excluded before operational quality is ever fully evaluated.
The issue, as Dunn emphasized, is often one of scale rather than business performance…and that distinction became foundational to the rest of the conversation.
William Lindstrom expanded on this idea by describing how many small businesses become “structurally invisible” to institutional markets.
While these businesses may be stable, profitable, and well-run, they remain too fragmented to justify the cost and complexity of traditional diligence. These owners frequently do not understand how to position their business to get to the ‘buyers table’ much less attract a buyer’s attention.
The result is a market where thousands of viable companies remain trapped between individual ownership and institutional relevance.
A turning point in the discussion centered around what the panel referred to as the “ERP myth.” For years, the lower middle market has largely assumed that businesses must operate on the same ERP or operating platform before they can be evaluated collectively.
Historically, that assumption made sense. Standardized systems simplified reporting, highlighted relevant financial data, reduced integration friction, and accelerated diligence.
But both Dunn and Lindstrom argued that the market may have confused the tool with the real objective! They suggested that the true requirement was never identical software - it was standardized, trustworthy, comparable data.
That distinction matters because AI-enabled reporting normalization now allows businesses operating on entirely different systems to present institutional-grade reporting without first undergoing expensive operational consolidation.
Lindstrom pointed to earlier enterprise software implementations - where organizations standardized entire operations - simply to create a common data structure.
Today, AI can increasingly normalize that data without requiring businesses to abandon the systems they already use. That shift may dramatically alter the economics and speed of coordinated transactions.
The conversation then turned toward why traditional roll-ups became known as slow, painful, and operationally difficult in the first place.
Historically, buy-side roll-ups required investors to acquire one company at a time, integrate operations, replace systems, standardize reporting, and repeat the process over multiple years. The complexity and cost associated with that model conditioned the market to believe that aggregation itself was inherently difficult.
The panel challenged whether those assumptions still apply to the marketplace in a world where reporting can be AI-normalized expediently, and companies can remain operationally independent while still being evaluated collectively.
That discussion led directly into the idea of syndicates - a sell-side model where multiple like-kind companies coordinate to create institutional-scale opportunities without fully merging operations before the sale.
Lindstrom argued that one of the most overlooked advantages of syndicates is that the sell-side already possesses what traditional buy-side roll-ups often lack: trust, relationships, and existing networks.
The advantage of a syndicate is:
Owners already know one another locally
They attend the same trade shows
They operate in the same geographies
They often face the same succession and exit challenges.
Instead of convincing disconnected owners to sell one at a time, the syndicate model allows owners to collectively create the scale necessary to attract institutional buyers.
In many cases, Lindstrom suggested, this process may happen faster than traditional roll-up strategies because the relationships and trust already exist.
The discussion also highlighted an important emotional component often overlooked in transaction conversations - legacy.
For many small business owners, the challenge is not simply maximizing valuation…it is finding a pathway that allows them to transition what they built without feeling isolated, forced into full consolidation or stripped of independence before a transaction occurs.
As the roundtable concluded, the discussion shifted toward what these changes may mean for the future of the Micro Cap Market.
Dunn noted that institutional buyers are constantly searching for proprietary deal flow and increasingly differentiated opportunities.
Coordinated syndicates, particularly those supported by standardized reporting and stronger visibility into operational performance, may eventually become a legitimate new category of institutional-grade acquisition targets.
The future of the lower-middle market may not depend entirely on making small businesses larger individually; it may depend on creating better ways for the market to recognize, evaluate, and organize value collectively.
And if that happens, the definition of what qualifies as “sellable” may begin to change.
Will Gladhart is Chief Marketing Officer at The PL3, where he leads brand strategy, content creation, and community engagement.
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