Industry explains very little of IRR variation - the R² from the multiple regression is just 0.06 (6%), and the joint F-test is insignificant (p = 0.14), meaning firm-level execution dominates sector choice as a return driver

Healthcare is the standout outperformer - with a median IRR of 39% vs. 24% for non-healthcare and a median MOIC of 3.8x vs. 2.9x, it also shows marginal regression significance (coefficient +0.21, p = 0.06–0.08)

Food & beverage is the clear underperformer - negative mean and median IRRs of -33% and -49%, a median MOIC of only 0.6x vs. 3.0x for peers, and a statistically significant regression coefficient of -0.52 (p = 0.04)

Software and business services - the two most popular ETA targets - are essentially average as software's median IRR (26%) and MOIC (2.9x) nearly match the full-sample figures (25%, 3.0x), and business services are virtually identical to the comparison group

Most sectors cluster tightly around the full-sample median IRR of ~25%, and no industry consistently dominates top-decile or bottom-decile outcomes, reinforcing that sector choice shapes deal sourcing strategy more than it predicts returns

A massive ownership wave is imminent - by 2035, ~6 million SMBs will face ownership transitions as baby boomers retire, with 1M+ viable for sale representing up to $5 trillion in enterprise value; annual exits could reach 665,000/year, 42% above 2011 levels

The system defaults to closure, not transfer - in 2022, 92% of SMB exits were closures vs. only 5% sales; 6–13% of those closures were likely avoidable, and fewer than 1 in 3 owners have a documented exit plan

Geographic and demographic risk is heavily concentrated - rural states have SMB enterprise value at risk as high as 3.2% of GDP; under current patterns, women and Black and Latino individuals would capture only 28% of transferring value, yet closing participation gaps could generate $2–3 trillion in new household wealth

The "missing middle" ($500K–$25M firms) is the most underserved segment - nearly 80% of projected exits fall among micro and emerging middle-market businesses, which are too small for private equity but too complex for start-up support programs, leaving them structurally invisible to buyers

The upside of getting this right is enormous - effective transitions could preserve up to $5 trillion in enterprise value, keep 12 million jobs in place, and protect ~$250 billion in annual local spending power, making this one of the largest near-term levers for inclusive wealth creation in the economy

Durability and sustainability beat financial engineering every time - recurring revenue, repeatable processes, and real operational systems are what create enterprise value, as financial engineering can amplify a business but cannot create one

The org chart is the most overlooked post-acquisition lever - combining teams requires clarity of duties, empathy for employees whose entire world just changed, and the humility to recognize that the acquired company's people may actually be better than yours

Technology is the single hardest and most consequential decision in a field services rollup - picking the wrong stack or over-developing it forces companies to throw human bodies at problems, drives up overhead, and can cause technicians to quit due to operational complexity

Sales and marketing in B2B field services is built on process, not raw horsepower - comp plans must be simple enough to fit on a napkin, incentivize the right customer mix and margin profile, and ensure no salesperson goes backwards, otherwise your best people simply leave

The unfair advantage of a rollup is the snowball effect of industry relationships - every acquired owner knows ten other owners, and if you do right by people and offer roll-forward equity, deal flow becomes inbound, making sourcing a function of reputation rather than cold outreach

Search is fundamentally a sales craft, not a research project - the edge comes from understanding owners, building trust, and having the discipline to stay in the game long enough for timing to work, as a well-written rejection can become an in-person meeting with the right human response

Managing search with a system beats managing it with motivation - the funnel can look full on Monday and feel empty by Friday, so consistency of weekly output - outreach, follow-ups, and pipeline hygiene - matters far more than heroic individual weeks

Seller motivation is as important to underwrite as the financials - the most critical information often lives in the gap between what owners say and what they actually need, and deals fail not just in Excel but in misaligned expectations

"Recurring revenue" is one of the most dangerous phrases in ETA - many businesses describe strong customer loyalty in a project-based model as recurring revenue, which can still be a great business but demands a fundamentally different underwriting lens and risk framework

Post-acquisition value destruction follows two repeatable human failure patterns - sellers who remain involved post-close create authority leakage through predictable ego and grief dynamics, while boards that are either too hands-off or too operationally involved compound CEO-level leadership risk, both of which require structural rather than interpersonal solutions