PL3 Virtual Roundtable Recap: Turning Business Quality Into Market Value
Updated: 8 minutes ago
Summary: This PL3 Virtual Roundtable explores why strong business performance doesn't always translate into market value. The discussion examines how scale, buyer economics, due diligence, market structure, governance, and post-acquisition readiness can influence whether business quality is ultimately recognized and rewarded.
Roundtable Date: September 24, 2026
For decades, business owners and advisors have focused on a familiar question: How do we build better businesses?
The answers are well established - strengthen leadership, improve operations, build a capable management team, create better governance and deliver stronger financial performance. All of those things matter, and all can contribute to enterprise value.
But what happens when an owner does those things and the market still doesn't recognize the quality of the business?
That question was at the center of the latest PL3 Virtual Roundtable, Market Architecture: Turning Business Quality Into Market Value.
William Lindstrom, CEO of CultureAIP; Bob Dunn, Chief Product Officer at ACG; and Lindsay Guzowski, CEO of The Crucible, joined PL3 CMO William Gladhart to continue the discussion around Market Architecture and examine a growing challenge in the private market: strong smaller businesses can perform well and still struggle to attract institutional buyers or achieve outcomes that reflect their quality.
The question may not simply be how to build better businesses. It may also be how to create market conditions that allow the quality of those businesses to be recognized and rewarded.
When Business Quality Isn't Enough
One of the central observations behind Market Architecture is that the market isn't necessarily overlooking smaller companies because they are poor businesses.
Lindstrom noted that smaller companies may outperform larger businesses on measures such as revenue growth or profitability percentages and still struggle to attract buyers because of their size.
“Their revenue growth might be better. Their profit percentage might be better. It's just their size is too small.” William Lindstrom
Bob Dunn's buyer-side perspective helped explain why.
Private equity firms operate within specific fund structures, investment periods and return expectations. They need to deploy meaningful amounts of capital within a finite period while leaving enough time to improve and eventually exit their investments.
Going significantly down-market can change those economics. Instead of completing a smaller number of larger transactions, a fund may need to complete many smaller transactions to deploy the same amount of capital. Each brings its own diligence, execution, management and integration requirements.
Scale can also influence perceptions of risk. Smaller businesses may have less sophisticated reporting infrastructure, greater founder dependency or thinner management teams - even when the underlying business itself is performing well.
That creates an important distinction.
“Too small to sell” isn't necessarily a judgment about the quality of a business. In some cases, it may be a reflection of whether the opportunity fits the economics and structure of the buyer.
Rethinking Scale and the Traditional Roll-Up
If scale is part of the problem, the traditional answer has been straightforward: buy a platform company and then build scale through a series of add-on acquisitions.
But that creates another set of challenges.
Lindsay Guzowski described an investment thesis in which a buyer acquires a platform and then needs to identify five, six or seven additional businesses. Each has to be found, acquired at the right price and ultimately integrated - all while the investment clock continues to run and market conditions can change.
That led to a different question during the Roundtable:
What if more of the desired opportunity could be assembled before the acquisition?
Rather than requiring independently owned businesses to merge beforehand, Market Architecture considers whether smaller companies can remain independent while becoming aligned around common buyer requirements, standardized information and a defined investment thesis.
Lindstrom described aligning financial information, due diligence standards and data structures with what buyers already expect. That could allow smaller companies to be assembled around a specific buyer thesis rather than requiring the buyer to search for individual companies that approximately fit it.
The potential advantage isn't simply greater scale. It's greater clarity - giving buyers a more defined opportunity that aligns with what they're already looking for.
The idea becomes even more significant when time enters the equation.
“Time is money with private equity.” - Bob Dunn
Private equity returns are highly sensitive to time. With a traditional platform-and-add-on strategy, buyers must locate, acquire and integrate additional companies before they can fully turn their attention toward organic growth and value creation.
Creating an Investable Opportunity
Simply bringing businesses together, however, doesn't automatically create an institutional-quality opportunity.
The structure must address the very issues that make smaller companies difficult for institutional buyers to evaluate in the first place.
Due diligence was a recurring theme throughout the Roundtable. Lindstrom noted that evaluating a smaller company can be more time-consuming and expensive because financial information, reporting systems and other data may not be organized according to institutional standards.
Market Architecture attempts to address that friction earlier by creating common standards around data, financial reporting and diligence.
That matters because a buyer looking at multiple independently operated businesses will naturally ask whether the numbers can be trusted, whether the information can be audited and whether the businesses can ultimately be integrated.
But information is only part of the equation.
Guzowski emphasized that buyers also have to understand what happens after the transaction:
Who leads the organization?
Where does the management talent come from?
Can the businesses work together?
And can the buyer clearly understand both what the businesses are today and what they realistically can become?
“The post-acquisition go-forward talent is absolutely critical.” Lindsay Guzowski
Her point reinforces an important part of Market Architecture: reducing transaction friction isn't simply about packaging businesses differently. Greater transparency, credible information, governance and leadership can all contribute to reducing perceived risk and giving buyers greater confidence in the opportunity.
Turning Business Quality Into Market Value
Perhaps the larger opportunity is that Market Architecture could help create a bridge between two parts of the private market that have historically struggled to connect.
On one side are millions of smaller privately held businesses, many of which may be profitable, growing and well-run but remain below the traditional thresholds of institutional investors.
On the other are buyers looking for attractive opportunities, sufficient scale and increasingly differentiated sources of deal flow.
Dunn described how properly structured opportunities could potentially create a new category between the traditional Main Street market and institutional private equity - giving buyers access to opportunities they might never encounter individually while giving smaller businesses exposure to institutional capital.
For owners, that could create another pathway toward liquidity and transition. For buyers, it could create access to new deal flow. And for advisors helping founders whose wealth may be heavily concentrated in their businesses, it could expand the range of potential transition strategies.
But realizing any of those outcomes still requires action.
Many owners know they eventually need to address succession, liquidity or ownership transition, but the demands of running the business make it easy to continually push those decisions into the future.
Dunn summarized the risk succinctly:
“Inaction is the deal killer.” - Bob Dunn
Market Architecture doesn't eliminate the need to build a strong business. Financial performance, leadership, governance, transparency, management depth and transition readiness remain fundamental.
Instead, it introduces a complementary idea: Continue building better businesses but also consider whether we can build better markets around them.
For owners who have spent decades building successful companies but remain below the traditional thresholds of institutional buyers, that distinction could open an entirely different conversation about scale, buyer access, liquidity and ultimately, enterprise value.
Will Gladhart is Chief Marketing Officer at The PL3, where he leads brand strategy, content creation, and communications.
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