A major demographic shift is underway in the American economy, presenting both a looming crisis and a significant investment opportunity. Each day, 10,000 baby boomers reach retirement age, many of whom own the small businesses—from hardware stores to accounting firms—that form the foundation of local communities. This trend is fueling what experts call the “Silver Tsunami,” the largest transfer of business ownership in U.S. history.
Over the next two decades, three million small business owners over the age of 55 are expected to exit their companies, putting an estimated $10 trillion in business value in play. However, a smooth transition is far from guaranteed. Nearly half of these owners have no succession plan. Unlike previous generations, their children are often not interested in taking over, pursuing different careers or moving to other parts of the country. Consequently, surveys show that only 30% to 40% of small businesses listed for sale are ever sold.
Without a scalable strategy to transition these enterprises to new operators, Main Street faces a potential mass extinction event. When these businesses close, communities lose not only essential services but also stable, well-paying jobs and the local sponsors who support everything from Little League teams to town events.
Traditional financial models have proven inadequate for this challenge. Private equity’s standard playbook—which often prioritizes short-term value drivers like raising prices and cutting costs within a five-year horizon—is ill-suited for the long-term, community-focused growth many of these businesses require. Small acquisitions demand the same due diligence as large ones but generate far less profit, incentivizing PE managers to pursue larger deals.
Alternative models like Entrepreneurship through Acquisition (ETA) and search funds, where an entrepreneur raises capital to buy and run a single company, offer a more hands-on approach. Yet, this model has failed to scale, often limited by rigid criteria and a bias toward candidates with Ivy League or banking backgrounds, excluding many experienced industry operators.
Meanwhile, a growing number of capable Americans are interested in running these companies but face immense barriers. An experienced manager may have deep operational knowledge but lack the significant capital for a down payment, the expertise to navigate complex transactions, or the support systems needed to handle the administrative burdens of ownership, such as payroll and tax compliance. The market itself is opaque and fragmented, with outdated listing platforms and little standardized data.
This succession crisis, however, represents a massive opportunity. Small businesses account for 40% of U.S. GDP, employ over 60 million Americans, and have created two-thirds of all new jobs in the last 25 years. They consistently rank as the most trusted institution in the country. Many demonstrate stable earnings through economic cycles and boast strong customer and vendor relationships. Because they are often overlooked by private-market investors, these businesses trade at valuation multiples two to three times lower than larger companies in the same industries.
Government programs like Small Business Administration (SBA) loans further enhance their appeal, offering favorable financing terms with low down payments. The model has proven resilient, with the average default rate for SBA 7(a) business acquisition loans standing at just 1.8% between 2019 and 2024.
New infrastructure is emerging to connect capital with talent and unlock this potential. Venture capital firm 8VC is among those investing in this space, backing platforms like Mainshares, which connects skilled operators with businesses for sale.
Building on this momentum, 8VC partner Denis Aven is launching a new firm dedicated to this strategy. The goal is to overcome the structural barriers that have kept institutional capital on the sidelines by developing a pipeline of top operational talent, leveraging AI and technology to streamline transactions and management, and empowering new owners through a non-control structure that aligns incentives for long-term value creation.
By providing aspiring entrepreneurs with capital, best-in-class tools, and a world-class technology network, this new model aims to preserve tens of thousands of jobs and revitalize the American tradition of ownership. As the Silver Tsunami approaches, investing in the infrastructure to support Main Street’s next generation of leaders will be crucial for the continued prosperity of communities across the country.
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