The New York Times recently put an extraordinary number on the private equity exit problem: 33,575 companies were sitting unsold in PE portfolios as of June 30, 2026, more than double the number a decade ago.
The article points to explanations that anyone reading this post will recognize immediately:
Higher interest rates have made leveraged acquisitions harder to finance.
Buyers and sellers remain far apart on valuation.
Sponsor-to-sponsor transactions, historically an important source of exits, have slowed.
Software companies purchased near the top of the market in 2021 are particularly difficult to sell today because valuations have fallen and buyers are trying to understand what AI means for future earnings.
As Andrew Milgram, managing partner and CIO of Marblegate Asset Management, told the Times, “Private equity is stuck because those companies have failed to fulfill their value promise.”
A company purchased at an aggressive multiple cannot simply market its way out of a bad entry valuation, and a strong management team cannot control interest rates, benchmark multiples or the willingness of lenders to finance the next buyer.
For some companies, waiting may still be the most rational course because the fundamental business remains sound and the greatest obstacle to an exit really is the market around it.
The problem is that the market explanation does not fully explain why some companies are exiting while others remain stuck.
McKinsey found that PE assets sold in 2024 and 2025 had median revenue growth two to three percentage points higher than assets that remained in portfolios. Across European PE assets, companies growing more than 25% annually sold at roughly a 50% premium to companies growing below 5%. McKinsey’s conclusion is straightforward: “Growth and profitability remain the strongest determinants of exit success.”
That raises a question worth asking about some of the companies stuck in your portfolio:
What if part of the exit problem is actually a growth problem?
And more fixably, what if some otherwise healthy portfolio companies are trying to produce growth this year with a go-to-market motion designed for 2021?
There is a good reason many portfolio companies still operate the way they do.
For years, the prevailing B2B SaaS growth model worked remarkably well. Companies could generate demand through paid search, publish content designed to capture category searches, deploy teams of SDRs that converted lists into meetings, measure marketing through MQLs and pipeline influence, and increase growth by adding sellers or increasing media spend.
When capital was inexpensive and SaaS multiples were expanding, revenue mattered, but the market was willing to reward growth even when the machinery producing it was not particularly efficient.
A PE firm acquiring a software company in 2020 or 2021 therefore had every reason to underwrite some continuation of those economics. The assumptions were not irrational because they reflected what buyers, capital markets and software valuations looked like at the time.
Those conditions have changed considerably.
AI has introduced another variable. Investors and acquirers are now trying to determine which software companies will benefit from AI, which will be disrupted by it, and whether long-established software economics such as per-seat pricing remain viable when AI agents begin performing work previously done by human users.
The same S&P Global analysis describes these questions as an additional complication for PE firms attempting to exit long-held software investments.
At the same time, the way B2B buyers discover and evaluate products has changed. Buyers can conduct far more research without speaking with sales. They research solutions through peers, communities, podcasts, LinkedIn and increasingly LLMs. They are also confronted with an enormous amount of automated sales outreach and AI-generated content competing for their attention.
That creates a hypothesis worth testing at the individual portfolio-company level: the GTM system that successfully connected a company with its buyers several years ago may no longer correspond particularly well to the way those buyers make decisions today.
Symptoms of a GTM motion - buyer preferred journey mismatch include that the sales organization can work harder and generate less. Marketing can produce the same volume of content (or more) while attracting fewer serious buyers. Paid search can continue consuming budget while generating fewer meaningful sales conversations. An SDR team can increase activity without materially improving pipeline quality. The dashboard still contains all the familiar metrics even as the economics deteriorate.
A surface-level question is, “When will the exit market improve enough for these companies to sell?” For a portion of the portfolio, the salient question may be, “What would have to change about this business for buyers to want it at the valuation we’ve targeted?”
These reflect two very different propositions. One assumes the asset is essentially ready and the market needs to cooperate. The other forces us to reconsider whether the growth story itself remains convincing enough for today’s buyer.
Bain’s 2026 Global Private Equity Report describes an environment in which the easy tailwinds PE once enjoyed cannot be taken for granted, putting considerably more pressure on operational value creation. With financing costs elevated and multiple expansion less dependable, growth in the underlying business has to carry more of the investment thesis.
McKinsey reaches a related conclusion. Its research on PE exits argues that operational performance must play a much larger role in generating returns. Its research on improving exit prospects is particularly clear about the relationship between growth, profitability and successful exits.
This does not mean GTM is the explanation for every stalled exit. But there is likely another category sitting inside your backlog: companies that should be growing faster given their products, markets and competitive positions, but are not.
A hypothesis worth investigating is that some portfolio companies are running a growth model built around assumptions that no longer hold. They are trying to generate demand through channels buyers increasingly ignore, measuring activity that may no longer predict revenue, using messaging that assumes prospects will do more interpretive work than they are willing to do, and asking salespeople to manufacture interest in accounts where there is little evidence of an active buying problem.
A portfolio company bought in 2021 or 2022 needs to produce top tier growth to generate the exit imagined in the original investment thesis.
One place to start is by questioning several assumptions that became deeply embedded in the SaaS growth playbook.
The first is the belief that more outbound activity produces proportionally more pipeline. For years, increasing SDR headcount, adding data providers and running more sales sequences could increase meeting volume. Today, buyers are surrounded by unsolicited messages, while AI has made it possible for virtually every competitor to produce basic personalized outreach at scale. When everyone can manufacture personalization, personalization itself becomes less distinctive.
The question therefore changes from “How many accounts fit our ICP?” to “Which of these accounts are actually showing evidence of a problem we solve?”
That sounds like a subtle distinction, but it changes the economics of outbound considerably. Instead of asking SDRs to create urgency across hundreds or thousands of theoretically qualified accounts, the GTM organization begins looking for signals that suggest urgency already exists and concentrates resources there.
A second assumption worth revisiting is that buyer intent can still be captured primarily through search.
Paid search remains valuable in many categories, but the journey between recognizing a problem and visiting a vendor’s website has become less direct. Buyers can learn through communities, live and streamed events, peers, podcasts, LinkedIn and AI-generated answers before a company ever sees the traffic.
A GTM model built primarily around capturing overt signs of demand can miss the opportunity of earlier problem recognition (aka alpha signals) and earning attention before a formal vendor search begins.
A third assumption is that pipeline volume tells us whether demand generation is healthy. A company can technically maintain healthy pipeline coverage while the quality and economics of that pipeline deteriorate. Opportunities may become increasingly dependent on sellers, partners, discounts or executive relationships. Marketing can continue producing “leads” that sales does not trust. The CRM shows activity while the underlying growth engine becomes more expensive and less repeatable.
Another possibility is that the company’s positioning has not kept pace with the market around it.
This deserves particular attention in software because AI is rapidly changing feature expectations and eroding differentiation. A company whose commercial story worked when the outcomes it enabled were unusual may now compete against dozens of products (as well as homegrown solutions) making similar claims.
If the buyer can no longer quickly understand why the product matters, what problem is urgent or why this particular company deserves consideration, the burden of creating that understanding moves downstream into sales. Longer sales cycles and weaker conversion can then look like sales execution problems even when part of the difficulty originated much earlier in the commercial narrative.
There is also the question of whether the ICP itself has changed.
Many growth models implicitly assume that the customers who bought five years ago remain the customers most likely to buy today. Yet economic pressure, consolidation, AI adoption and changing organizational structures can materially change where urgency exists.
Continuing to allocate sales and marketing resources according to a static ICP can cause a company to pursue theoretically attractive accounts rather than companies demonstrating evidence of a current problem.
Finally, organizations frequently attack these symptoms individually.
Marketing tries to increase lead volume. Sales buys another sequencing platform. Leadership replaces the CRO. An agency changes paid-search campaigns. Someone redesigns the homepage. Each intervention can improve an isolated metric without answering the larger question:
Does this company still have a coherent GTM model for the way its buyers make decisions today?
Looking at the backlog this way creates a useful distinction for Operating Partners.
Some portfolio companies are market-stuck. Their growth is healthy, margins are improving, buyers understand the asset and the primary obstacle is valuation, financing or timing. These companies may simply require patience and continued execution.
Others may be valuation-stuck. They are good businesses, but the entry multiple was aggressive enough that today’s market cannot produce the targeted return without some combination of significant growth, margin expansion or revised expectations.
A third group may be growth-stuck. These are companies with good products, viable markets and potentially attractive economics that are nevertheless producing less growth than their potential suggests. Their problem is not necessarily that demand disappeared. It may be that their system for finding, creating and converting demand has not adapted to the way buyers behave now.
Those distinctions matter because each situation requires a different operating response.
Extending the hold period may be entirely sensible for the first.
The second may require a difficult conversation about valuation and the original investment thesis.
The third may contain the most actionable opportunity because some of the factors suppressing growth may still be within management’s control.
There is evidence that the exit market is already making this distinction.
McKinsey found that PE assets successfully exited in 2024 and 2025 were growing faster than assets remaining in portfolios, while S&P Global’s analysis of 2026 exit activity indicates that buyers remain available for attractive assets even as many others remain in limbo.
In other words, the exit window may not simply be open or closed. It may increasingly be selective.
That makes “wait for the market” an incomplete value-creation strategy for a company whose growth rate itself is part of what is keeping buyers away.
A useful review would begin by examining the assumptions underneath the existing growth plan rather than starting with a list of marketing tactics.
The review should also examine what happens further down the funnel.
Those questions move the conversation away from “marketing isn’t producing enough leads” toward something much more useful:
Does the entire growth system still reflect the way today’s buyer discovers problems, evaluates options and decides to act?
The answer will not always be encouraging. In some companies the problem will prove structural. The addressable market may have changed. The product may no longer be differentiated enough. AI may have fundamentally altered the economics of the category. The original valuation may simply be unrecoverable within a reasonable timeframe.
A GTM intervention cannot fix those problems, and pretending otherwise does not help an Operating Partner make a better decision.
But in other companies, the analysis may reveal something considerably more actionable: the business still has a valuable product and a viable market, while the machinery connecting the two has become outdated.
Those are exactly the companies where another year of waiting may be wasting valuable time.
The Times’ 33,575-company figure is a reminder of how much capital is currently waiting for an exit environment that has been slow to arrive. Some of those companies genuinely need the market to change. Some need valuations to reset. Some need more time, and some may require a much deeper reconsideration of the original investment thesis.
But if you have a portfolio company that should be growing and isn’t, there is another possibility worth investigating before assuming the market is entirely responsible.
The company may have a GTM problem.
That doesn’t mean it needs another agency, a new ad campaign or more SDRs. Adding more activity to an outdated growth model can make the existing problem more expensive.
The first job is diagnosis.
That’s why we built the Austin Lawrence GTM Checkup.
We look across the GTM system — market and ICP, positioning and messaging, demand generation, channels, sales and marketing alignment, pipeline quality, conversion and the assumptions underlying the current growth model — to answer a more fundamental question:
Is there a fixable GTM problem suppressing growth, or is something more structural going on?
For an Operating Partner, that distinction can matter considerably.
If the analysis shows that the company has a viable market and product but its GTM motion has fallen behind today’s buyer, there may be a practical opportunity to improve the growth trajectory rather than simply waiting for external conditions to change.
If we determine that GTM is not the primary problem, that’s useful too. It gives you evidence to stop throwing sales and marketing resources at an issue they cannot solve and focus attention on more fundamental issues.
So if you have one or two PortCos where the numbers don’t quite make sense — companies that should be growing faster than they are — we’d be happy to put them through the GTM Checkup.
The purpose isn’t to sell you on the idea that every stalled company has a GTM problem.
It’s to find out whether yours does.
Learn more about the GTM Checkup here or if you’d like to have a quick chat to discuss what’s holding your portfolio companies back, click here or email jm@austinlawrence.com to schedule a call.