Capstone Business Owners Research Survey Finds CEOs Accelerate Performance Improvement Initiatives and Capital Markets Activity Amid Legislative Disruption
Capstone Partners has released its 2025 Middle Market Business Owners Survey Report, with insights from privately-owned companies across the U.S. This report combines Capstone’s in-depth middle market knowledge with proprietary data obtained from 401 participating owners of privately held, middle market companies. Capstone surveyed middle market business owners across industries in the U.S. between August 11, 2025, and October 3, 2025. The full report, available for download below, evaluates the health and progress of the middle market in 2025, with sections including 1). State of Business & Decision Making, 2). Growth, Financial & Exit Planning, and 3). Revenue Impacts, Forecasts & Economic Outlook. The report also reveals data by industry, company size, and revenue generated, highlighting statistically significant variances.
Inflation Tops CEO Growth Concerns for the Third Year
Inflation has remained a persistent headwind to middle market business operations. For the third consecutive year, the majority (92.5%) of CEOs ranked inflation as their top concern regarding company growth. Interest rates have remained the second-most concern for company growth, as noted by 82% of CEOs. To adjust to lingering inflation and interest rate pressures, most business owners have looked to identify business vulnerabilities (53.9%) and reduce business expenses (51.1%).
Amid recent tariff-induced demand weakness, increased attention on margin and revenue preservation has resulted in customer retention overtaking market demand as CEOs’ third-ranked hurdle. These headwinds have also increased owners’ workload/stress each year since 2023, while hiring and competition concerns have fallen during the same period. Expected interest rate cuts and trade agreements will likely help alleviate these pressures in 2026.
Trade Volatility Drives Owners to Adjust Business Strategies
The uncertain and shifting trade landscape has had a significant impact on U.S. businesses in 2025. Among surveyed CEOs, 86% have expressed concern with the impact of tariff policies on their industry, with owners in the Transportation & Logistics (100%), Industrial Technology (96.7%), and Technology, Media & Telecom (96.2%) industries showcasing the most concern. Nearly half (46.6%) of CEOs have identified rising input costs as their top tariff hurdle, followed by inflation (27.4%) and supply chain risks (24.2%). The lion’s share (39.7%) of business owners has reduced company expenses to adjust for tariffs. CEOs have also reconfigured supply chains (34.2%) and invested in U.S. manufacturing operations (32.4%).
Adjustments to Business Strategy in Response to Tariffs
Question: How has your business strategy changed to account for the uncertain and shifting tariff policy environment? Source: Capstone Partners’ Middle Market Business Owner Survey, Total Sample Size (N): 401
CEOs Detail Expected Impacts of the One Big Beautiful Bill
The ratification of the One Big Beautiful Bill (OBBB) this past July is expected to have significant financial and tax implications for U.S. business owners, including middle market operators. Among surveyed CEOs, the lion’s share (41.4%) believes the OBBB will have a neutral effect on company operations or are unsure of the potential impacts of the legislation on their business.
While 21.9% of CEOs expect the bill to have a positive impact, an even larger proportion (36.7%) anticipate negative consequences. Sentiment was split across company demographics, with larger businesses (201+ employees) expecting more positive tailwinds from the OBBB compared to the more negative outlook among smaller (1-100) and mid-sized (101-200) businesses.
Owners Accelerate Capital Markets Activity in 2025
Middle market business owners have increasingly explored capital markets transactions to accelerate company growth, secure personal liquidity, and optimize capital structure. In 2025, 57.4% of surveyed CEOs completed at least one capital markets transaction in the last 12 months, a 13.3% increase year-over-year (YOY). This growth mirrors expansion in broader capital markets activity. Interest rate cuts have supported this expansion, evidenced by 24.4% of owners securing debt capital (+5.8% YOY).
Equity capital raises have remained the most popular growth lever YOY, pursued by 29.9% of CEOs in 2025. In addition, 21.7% of CEOs divested assets, 17.5% acquired another business, and 7% sold their company. Complex capital markets deal proceedings have pushed many business owners to hire an investment banker; these CEOs have completed capital markets transactions at a higher rate than those without an advisor, demonstrating their added value.
CEOs’ Capital Markets Activity Over the Last 12 Months
Question: Which of the following business strategies have you enacted over the last 12 months? Source: Capstone Partners’ Middle Market Business Owner Survey, Total Sample Size (N): 401
Performance Improvement Support Becomes Increasingly Critical
Reaching or enhancing profitability has continued to serve as a leading goal for CEOs coming out of a period of elevated interest rates, supply chain pressures, and significant inflation. Of note, increasing profitability is the leading operational initiative for middle market business owners over the next 12 months, as noted by 22.2% of CEOs surveyed. Improving efficiency and implementing artificial intelligence (AI)/machine learning (ML) tools will also be pertinent operational initiatives for 2026, as identified by 16% and 11.2% of owners, respectively.
Among total CEOs surveyed, the lion’s share (45.3%) emphasized performance improvement support as the most useful resource in support of their primary operational initiative, followed by capital investment (31.4%) and strategic partnerships (23.2%). The share of business owners that require performance improvement support increased 3.4% compared to the prior year as CEOs seek to maintain margins and enhance operational efficiencies amid a difficult macroeconomic environment and ongoing trade headwinds.
Primary Operational Initiatives Over the Next 12 Months and Support Required
Questions: What will be your primary operational initiative over the next 12 months?/Support for primary initiative Source: Capstone Partners’ Middle Market Business Owner Survey, Total Sample Size (N): 401
Owners to Pursue Organic Growth & Equity Capital
More than half (55.9%) of business owners surveyed plan to execute growth strategies over the next 12 months, signifying a shift away from managing financial stability towards teeing up for increased growth going into 2026. CEOs have increasingly pursued growth measures that allow them to expand the business while maintaining operational control. Among CEOs planning growth strategies, most have prioritized organic initiatives including expanding offerings (56.7%), diversifying customer bases (53.1%), and penetrating new geographies (37.1%). Inorganic growth practices have increasingly become a key strategic option to capitalize on improving economic conditions. Of note, 27.2% of business owners plan to raise equity capital over the next 12 months, with 22.8% pursuing debt to finance growth initiatives. Merger and acquisition (M&A) intent has seen a similar rise in attention, with the share of CEOs planning both buy-side and sell-side engagements increasing 5.9% and 5.5% YOY, respectively. Further interest rate cuts are likely to spur additional M&A activity.
CEOs’ Top Growth Strategies for 2026
Question: Which of the following growth strategies are most important to prioritize over the next 12 months? Source: Capstone Partners’ Middle Market Business Owner Survey, Sample Size (N): 224
Based on our data, financial services demand has been directly tied to business owners’ primary initiative over the next 12 months. Of note, the lion’s share (32.9%) of owners anticipates a need for growth strategy support services to facilitate organic and inorganic expansion. Nearly one-fourth of owners need accounting and audit support to shore-up cash flows and establish financial stability. Similarly, 38.1% of CEOs require equity capital advisory services to support operational initiatives and business expansion plans. In addition, 20.7% of CEOs demonstrated an interest in accessing relevant industry research to keep up with emerging industry trends, complete competitor analyses, and track capital markets activity in their space.
Exit Preparation Lends to Higher CEO Confidence
Succession planning has returned after economic turmoil forced owners to focus on present operations rather than future plans. The recent M&A downcycle has resulted in a backlog of exit-ready companies, positioning the market for intense activity once conditions normalize. Of note, 75.8% of CEOs started exit planning in 2025, a three-year high. Smaller firms (1 – 100 employees) are the least prepared, with just 57.5% having exit plans in place. Among CEOs who have started to prepare for a business exit, 74% feel confident in their business’ success one year after their departure—compared to just 53.6% who have not prepared. Investment banks can provide assurance to owners, allowing them to approach exits with confidence. Among business owners who have retained an advisor, 87.2% have expressed confidence in post-departure. Investment banks offering M&A advisory services act as a partner to business owners, leveraging industry knowledge to achieve the client’s goals. As proper M&A preparation can take two to three years, starting the dialogue with an advisor as early as possible is best practice.
Business Owner Exit Preparation Reaches a Three-Year High in 2025
Question: What steps have you taken to prepare for a future exit? Source: Capstone Partners’ Middle Market Business Owner Survey, Total Sample Size (N): 435, 404, 401
U.S. Economic Outlooks Moderate while Industry Outlooks Remain Strong
Clarity around interest rates and inflation have positively affected business owners’ economic outlook for the next 12 months. The share of CEOs with a very positive U.S. economic outlook has increased for the first time in five years, rising to 18.7% in 2025. A combined 50.1% of business owners in 2025 reported a very or somewhat positive outlook on the U.S. economy over the next 12 months, indicating a shift in the cautious economic position displayed by CEOs in recent years. This trend is consistent both upstream and downstream from the U.S. economy, with 53.8% of respondents sharing a positive outlook on the global economy and 55.2% expressing optimism within their local economies. Despite recent developments, inflation and interest rates remain top-of-mind concerns for business owners. Further interest rate cuts, the resolution of ongoing trade conflicts, and lessening of inflationary pressures will prove critical to maintaining this upward momentum in outlook.
Despite macroeconomic-level developments providing more favorable economic outlooks, middle market business owners have continued a trend of decreasing optimism within their respective industries. While the majority (65.8%) retain a positive 12-month industry outlook, this percentage has consistently fallen since 2023. Notably, the share of CEOs expressing a negative industry outlook has increased by a significant 6.6% YOY. In line with these expectations, business owners reported a 7.6% decrease in positive revenue growth over the next 12 months, falling to a three-year low of 72.6%. Supply chain-sensitive industries such as Consumer & Retail and Industrials shared higher rates of negative sentiment amid a volatile international trade environment. In contrast, technology-enabled industries (Business Services, Financial Technology & Services, Industrial Technology, and Technology, Media & Telecom [TMT]) had higher positive industry outlooks, shielded from elevated input costs and global trade-related disruptions.
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Izzy Jack and Brendan Bradley, Associates, were the lead Market Intelligence contributors to this report.
