Today’s guest is Eliot Kerlin, Founder and Managing Partner of Broadwing Capital. With 25 years of experience in the lower middle market, Eliot reflects on how the ecosystem has evolved—from fund sizes and leverage trends to seller sophistication and the rise of independent sponsors and family offices. He shares how underwriting, equity contributions, and operational involvement have changed, and why operational alignment from the start is a prerequisite to growth. The conversation closes with Broadwing’s investment philosophy, its approach to founder alignment post-transaction, and a look into their recent acquisition of CloudScale 365.
Discussion Points:
- Fund size expansion and the shifting definition of “middle market”
- Rising purchase multiples, increasing equity contributions, and their implications
- The growth of “operational private equity” and specialization
- How sell-side advisory channels have expanded and digitized
- The rise of independent sponsors and new buyer pathways
- Family offices as capital partners in private equity
- Broadwing’s investment strategy and focus on skilled trades, manufacturing, and services
- Organic growth versus acquisition-led growth
- Evaluating management teams and cultural fit
- Stakeholder impact planning and employee investment initiatives
- Founder alignment and setting post-transaction expectations
- The acquisition thesis behind CloudScale 365
- AI as both an operational tool and a client advisory opportunity
- Balancing playbooks with the uniqueness of each company
Masters in Small Business M&A is produced by its host Peter Lehrman and the team at Axial (www.axial.com). Axial makes it easy for small business owners to confidentially explore growth capital and exit transactions with top-ranked lower middle market M&A advisors and professional capital partners. In every episode, we explore the dynamic world of small business M&A, interviewing a mix of proven and emerging owners, operators, acquirers, and M&A advisors whose strategies and methods are being put to the test.
If you’d like to go deeper, head to Axial.com, where we make available the Axial member directories, downloadable tools for dealmakers, the Axial quarterly lower middle market investment banking league-table rankings, the SMB M&A pipeline report, and other useful information. If you’re a business owner, professional acquirer, or M&A advisor, you can start using Axial for free at Axial.com.
