If you’re a founder, investor, or executive weighing your next big move in acquiring a business, selling one, or raising capital, you’ve probably heard some version of this:
“Most M&A deals fail.”
But recently, a new study came out contradicting the overarching industry belief in saying that most M&A deals, in fact, do succeed.
Both statements are circulating right now in reputable publications. Both come with compelling data. And yet, they point in completely opposite directions.
So it leaves the average entrepreneur wondering, which is it?
We believe the truth lies not in the contradiction, in the nuance. And if you’re at a strategic crossroads, understanding that nuance could be the most valuable move you make this year.
Contradictory Headlines, Same Question:
Do Deals Actually Work?
In late 2024, NYU professor Baruch Lev and University at Buffalo’s Feng Gu released The M&A Failure Trap, based on a study of 40,000 public deals. Their conclusion was stark:
“70–75% of acquisitions fail to deliver on their promise.”
They define failure rigorously, concluding the deals that don’t increase earnings, lose shareholder value, or result in goodwill write-downs. They found the factors contributing to their findings were overconfident executives, poor integration, and pressure to grow at all costs.
But in early 2025, Harvard Business Review published new research from Bain & Company that flipped the script finding that:
“Most M&A deals succeed.”
According to Bain’s data, nearly 70% of deals over the last 20 years have delivered positive results. What we found really interesting, was what they define as “success” looks very different.
The Bain article, while optimistic, uses a broader lens. Success isn’t just about financial upside. It can include:
- Gaining access to a new market
- Acquiring new capabilities (like AI or cybersecurity)
- Building M&A competency within a company
- Learning through execution, even if projections fall short
This definition of success is more inclusive (and more forgiving) and reflects the real complexity of modern business.
The Public vs Private Lens:
Different Stakes, Different Scorecards
Another important factor in the contradiction between success and failure rates is the difference between public and private company deals.
Most of the data in The M&A Failure Trap focuses on public companies, where success is measured against the harsh reality of quarterly earnings, analyst expectations, and most visibly, the stock price. Public markets are impatient. Integration takes time but share prices don’t always give leaders the room to get there.
When a public company misses projections after an acquisition, the deal is often judged as a failure, regardless of the long-term strategic value it may hold. The stakes are immediate, visible, and tied to shareholder return.
Private companies operate under a different set of conditions. There’s often more flexibility on timing, more control over integration, and greater alignment between leadership and ownership. The definition of success is less rigid because the audience isn’t Wall Street, it’s the people who built the company, lead it, and live with its decisions.
This is why it’s especially critical for private owners to define success for themselves. In many ways, the opportunity is greater, but so is the responsibility to get it right.
But here’s where it matters, and how we suggest these findings are interpreted for our own businesses:
By defining what success looks for our own lives and business.
We believe the danger isn’t in disagreement, but in defaulting to someone else’s definition, without defining success for yourself. If we only judge deals by public market metrics or headline outcomes, we risk missing what really matters to the people inside the business.
Why Your Definition of Success Is The Strategic Move
At our Firm, we start every client engagement with a simple but profound exercise:
Defining what success means to you.
It’s the first step in our Strategic Preparation Framework, and it shapes everything that comes afterwards; valuation strategy to deal structuring to cultural fit.
Because here’s the hard truth: if you don’t define success early, someone else will define it for you. And it will almost always be narrower, faster, and less personal than it should be.
Your version of success might include:
- Preserving your leadership team
- Protecting your company culture
- Exiting on your own timeline- not someone else’s
- Growing with the right partner.
These goals may not show up in a contract. But they shape what your “Yes” looks like.
That’s why we see Strategic Preparation not as a checklist, but as a mindset. It’s not about waiting until a buyer comes knocking. It’s about getting ready so that when the timing is right, you recognize it.
Weigh The Opportunity Cost
Because The Deal You Say Yes To Closes The Door on Others
Success isn’t just about what a deal delivers, it’s also about what it costs you in unseen ways.
Every transaction comes with an opportunity cost. The capital, time, focus, and leadership energy it takes to pursue a deal is energy you’re not putting into organic growth, internal development, or other strategic paths. Even a “good” deal can be the wrong one if it distracts you from a better route you didn’t take.
This is where overconfidence and urgency become especially dangerous. When deals are pursued without weighing what’s being sacrificed, or who might be better served by staying the course, leaders can find themselves locked into strategies that don’t truly serve their overarching goals.
So part of defining success is being honest about what makes a deal truly compelling. What makes it strong enough to justify the focus, capital, and opportunity it displaces. Because when a deal closes, many times, so does every other path you might have taken.
How To Think About This if You’re a Seller, Buyer, or Owner
Whether you’re preparing for a sale, exploring acquisitions, or somewhere in between, here’s important considerations:
- Beware the one-size-fits-all stat. The “70% fail” metric is often tied to large, cross-industry deals with cultural clashes and inflated expectations. Smaller, strategic, private, or founder-led transactions often follow a different playbook, and therefore, a different outcome.
- Plan for the integration before you sign. Even good deals can fall apart without a plan for people, culture, systems, and leadership. Success is defined in what happens after the close.
- Don’t let urgency dictate strategy. Deals driven by external pressure, unrealistic or unclear expectations, tend to underperform, while steady, well-prepared operators tend to outperform.
Practical Advice for Leaders Right Now
Here’s what we’re advising our clients in 2025:
- Define success on your terms.
Although an important factor, not every win is financial. Clarify what would make the deal worth it for you, and what would make you walk away from the table.
- Start preparing before you need to.
The best deals come when preparation meets opportunity. Clean books, clear governance, strong teams, and a crisp story set you apart.
- Measure value beyond the headline.
Consider how a deal supports your mission, culture, and long-term momentum, not just your bank account.
- Surround yourself with truth-tellers.
You don’t need hype. You need clarity, calm, and a team that knows how to navigate change with you, not just for you.
- Understand the terms of the deal you are offered
What is the payment structure and status of key personnel after the deal? Do you have a mechanism to evaluate the “fairness” of the offer based on current market conditions?
Final Thought: Define Success For You Before You Chase It
There’s no shortage of opportunity when you know how to look. That’s why we tell our clients:
M&A isn’t just about being ready to act. It’s about being ready to win, but by your own definition.
So before you ask if it’s a good time to sell or buy, ask this first:
What does success mean to me?
And how prepared am I to make it real?
We’d love to hear your definition.
Sources:
- Lev, B. & Gu, F. (2024). The M&A Failure Trap.
- Stasik, J. (2024). A Better Approach to Mergers and Acquisitions. Harvard Business Review.
- Kidwai, A. (2025). How to Succeed at M&A When Most Mergers Fail. Newsweek.
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