There’s no such thing as “static” market positioning.
Especially not in the world of M&A.
One of the biggest mistakes founders make when preparing for an exit is assuming that what worked last quarter — or last year — will work again. But buyer psychology doesn’t sit still. It moves with the cycle. And if your positioning doesn’t adapt, your business story falls flat.
I’ve led companies through multiple market phases — from hyper-growth expansions to full-blown contractions — and I’ve advised countless founders doing the same.
What I’ve learned is simple:
Your market positioning is not just a reflection of your company. It’s a response to the buyer environment.
In this article, I’ll walk you through how to evolve your positioning across hot, cooling, and cold deal cycles — so you always stay one step ahead.
What Do We Mean by “Market Positioning”?
Market positioning is how your company is perceived in the eyes of buyers. It includes:
- Your value proposition
- Your competitive differentiation
- Your ideal customer profile
- Your pricing, margins, and growth model
- The narrative you tell about who you are and why you matter
And in M&A, your positioning must also answer the buyer’s core question:
“Why is now the right time to buy this company?”
That’s where the cycle comes in.
The Three Phases of M&A Deal Cycles
1. Hot Markets (Expansion Cycles)
- Valuations are high
- Capital is abundant
- Buyers are aggressive
- Speed trumps caution
2. Cooling Markets (Late-Stage Peaks)
- Valuations plateau
- Buyer diligence increases
- More structure in deals (earnouts, seller notes)
3. Cold Markets (Recessions or Contractions)
- Fewer buyers in market
- Valuations compress
- Cash becomes king
- Only the strongest deals survive
How to Position in a Hot Market
Your Buyer’s Mindset:
“We’re going to miss out if we don’t act fast.”
Your Strategy:
- Lead with growth and momentum
- Emphasize your market capture rate
- Tell a future-focused story (TAM, roadmap, hiring plans)
- Highlight how little funding you’ve used — buyers love capital efficiency in boom times
Kris’s Insight:
When I exited Pepperjam, the market was cooling but still relatively warm. We positioned ourselves as a category leader with aggressive upside. That made the timing feel urgent — and gave us negotiating power.
How to Position in a Cooling Market
Your Buyer’s Mindset:
“We like the company — but we need proof, not hype.”
Your Strategy:
- Shift the story toward profitability and predictability
- Show repeatable sales processes and low churn
- Position your team as battle-tested, not just visionary
- Anticipate objections — and answer them before they’re asked
Bonus Move:
Introduce structured options early in conversations (e.g., performance-based earnouts). This signals realism and partnership — two things buyers crave when uncertainty rises.
How to Position in a Cold Market
Your Buyer’s Mindset:
“We’re only doing deals that feel bulletproof.”
Your Strategy:
- Highlight cash flow, not just revenue
- Demonstrate capital efficiency and cost control
- Show customer loyalty and contract length
- Recast your business as a recession-resistant asset, not a growth-stage gamble
Narrative Angle:
“This is a disciplined, durable company that will not just survive the downturn — it will gain market share.”
The Risk of Not Changing Your Positioning
We’ve seen it again and again:
- Founders showing up with “expansion” stories in a contraction cycle
- Pitch decks full of headcount growth during layoffs
- Valuation expectations that are two quarters out of date
These mismatches don’t just kill deals. They hurt your brand.
When your positioning feels out of sync with buyer sentiment, it creates friction — and friction kills momentum.
In The Entrepreneur’s Exit Playbook
In the book (grab it here), I emphasize the idea of founder optionality — the ability to make decisions before you’re forced to.
That includes narrative flexibility.
If your only story is growth, you’re stuck when the market stops rewarding it.
If your only story is discipline, you’ll miss opportunities in boom cycles.
You need story versatility — and that comes from understanding the cycle.
How to Know When the Cycle Is Changing
No founder has a crystal ball. But there are signs:
- Deal volumes rising or falling quarter over quarter
- Strategic buyers pausing activity or changing terms
- Private equity tightening investment criteria
- Valuation multiples dropping in your peer set
- Headlines shifting from “expansion” to “efficiency”
At Legacy Advisors, we track this weekly — and advise founders to adjust positioning accordingly.
Kris’s Framework: Repositioning Across the Cycle
Here’s how I guide our clients:
1. Build Three Narratives
Have a “growth story,” a “stability story,” and a “resilience story.” Then lead with whichever aligns best with market sentiment.
2. Update Your Benchmarking
What comps were used 6 months ago may not work today. Always ground your positioning in current comps, not historical highs.
3. Test Your Narrative Early
Get feedback from trusted advisors or friendly buyers. Don’t wait until you’re live in-market to realize your story isn’t landing.
4. Be Proactive, Not Reactive
If you’re seeing sentiment shift, update your CIM, forecast, and positioning deck before buyers ask you to.
Real Deal Example
We advised a founder in mid-2022 who wanted to lead with a “triple your money in 3 years” growth story.
By Q3, the market had shifted. Buyers wanted EBITDA, not aspiration.
We repositioned the company as a cash-flow-positive niche leader with low burn and a loyal customer base.
The founder was nervous — but it worked.
They closed a deal with better structure and fewer surprises.
Buyer Positioning vs. Investor Positioning
Founders often confuse M&A positioning with fundraising positioning.
Here’s the difference:
| VCs Want | Buyers Want |
|---|---|
| Big vision | Predictable cash flow |
| TAM | Net retention |
| Burn rate runway | Operational leverage |
| Disruption | Integration potential |
If you’re exiting, stop selling the dream. Start selling the system.
Kris’s Final Checklist: Is Your Positioning Cycle-Aligned?
- Does your narrative reflect current market sentiment?
- Are your materials built for a buyer — not an investor?
- Have you validated your comps in today’s market?
- Are you highlighting proof over promise?
- Can your positioning evolve if the cycle changes mid-process?
If not — it’s time for a positioning tune-up.
Final Thoughts
Deal cycles aren’t a side note. They’re the stage on which your entire exit plays out.
Founders who understand cycle dynamics — and evolve their positioning to match — win more often, close faster, and walk away with better terms.
You don’t need to predict the future.
You just need to meet it where it is.
And when the market changes — change with it.
That’s what real M&A leadership looks like.
Frequently Asked Questions About How Market Positioning Changes During Different Deal Cycles
Why does market positioning need to change based on the M&A cycle?
Because buyers think differently depending on where we are in the economic and deal cycle. In hot markets, they’re often driven by speed and growth potential. In cold markets, they want stability and cash flow. If your positioning doesn’t evolve with the market, your business narrative will feel tone-deaf. As Kris Jones emphasizes in The Entrepreneur’s Exit Playbook, great exits happen when your story aligns with buyer psychology — and buyer psychology is shaped by the cycle. Adapting your positioning shows maturity, awareness, and credibility — three things every serious buyer wants to see.
What’s the biggest risk of using outdated positioning in a changing market?
You lose credibility and momentum. For example, if you’re pitching a high-growth vision with aggressive spend and no path to profitability during a downturn, buyers may walk away — even if your fundamentals are solid. They’ll assume you’re disconnected from reality or not ready for serious negotiation. Poorly timed positioning also makes it easier for buyers to push for unfavorable terms, as they can claim you’re overvaluing your company. Kris often tells founders: your story must evolve, or it will become your weakness instead of your weapon.
How can I tell what stage of the M&A cycle we’re in?
Watch the signals. When valuations are high and deal activity is brisk, you’re likely in a hot cycle. When headlines start shifting from “record funding” to “cost-cutting” or when PE and strategics become slower to respond or ask for more structure in deals — the market is cooling. In a cold cycle, you’ll see fewer active buyers, longer diligence processes, and a sharp focus on cash flow and customer retention. At Legacy Advisors, we monitor these indicators closely and help our clients recalibrate their market narratives to match what buyers want at each stage.
Should I create multiple versions of my pitch or CIM for different buyers or cycles?
Yes — within reason. You don’t want to create confusion or inconsistency, but it’s smart to lead with different positioning angles depending on the climate. For instance, a hot-market CIM might lead with growth metrics, while a cooler-market version highlights EBITDA, retention, and operating leverage. Think of it like tailoring a resume for different jobs: the core is the same, but the emphasis shifts based on what the audience values. Kris recommends building a flexible narrative toolkit — so you’re ready no matter when the buyer call comes.
What if the cycle changes during my deal process — how do I pivot my positioning?
Start by assessing your current narrative. Is it built entirely on growth assumptions? If yes, begin shifting toward proof points — customer case studies, efficiency metrics, updated forecasts. Communicate early with your advisors and potential buyers: acknowledge the change and position your company as prepared, not surprised. At Legacy Advisors, we’ve seen founders recover deals mid-flight by proactively reframing the conversation. Buyers don’t expect perfection — they expect realism. Showing you can adapt your positioning to real-world changes builds trust and can actually improve your negotiating leverage.