Why Now Is the Time to Plan Your Company’s Future

The hardest decision in business isn’t starting—it’s knowing when to leave.

For middle-market business owners, this reality has never been more pressing. Your middle-market company is more attractive to the private equity market than ever before. The convergence of secondary market liquidity and middle market attractiveness creates a rare window of opportunity for business owners.

The secondary market for private fund stakes has exploded, reaching a record $160 billion in transactions last year.

In 2025, the middle-market sector has shown remarkable strength, outpacing broader trends in private equity. Transaction activity has climbed steadily, with deal value reaching $97.2 billion in the second quarter—a healthy rise of 4.9% from the first quarter and a notable 18.1% year-over-year increase.

Nearly 1,000 deals were closed or announced during the quarter, positioning the market for one of its most successful years in history. Simultaneously, a mix of carveouts, take-private transactions, and opportunities tied to founder-led businesses is actively shaping the landscape. Meanwhile, valuations have stabilized, aligning with pre-pandemic norms and further fueling investor interest. This backdrop represents not just a shift in momentum—but a compelling case for middle market owners to act with intention as they consider their future.

The question isn’t whether you’ll exit your business—it’s whether you’ll do so strategically or reactively.

The New Reality of Private Equity

The secondary market has transformed from a distressed-seller backwater into a mainstream liquidity channel. This evolution matters to you because it fundamentally changes the calculus of middle market exits.

Private equity firms are sitting on aging portfolios. Holding times for buyout-backed companies continue to stretch well beyond the traditional five-year window. Distributions compared to in-ground assets have decreased across private equity, real estate, and venture capital—leaving hundreds of billions in net asset value trapped in aging funds.

For middle-market owners, this creates a paradoxical opportunity: Your company is more attractive than ever.

Why? Middle-market firms offer what large-cap companies cannot: flexibility, adaptability, and significant headroom for operational enhancement. The numbers tell the story—valuation multiples for midsize companies have averaged 16% lower than their larger counterparts over the past seven years, while delivering superior returns. Upper-quartile middle-market buyout funds have generated a net IRR of 22.1% since 2000, compared to just 19.0% for large buyout funds.

This 3.1% performance gap isn’t marginal—it’s massive.

Add to this the ability to often lever up middle market companies, and the coming generational wealth transfer—$30 to $40 trillion passing from baby boomers to their successors over the next 25-30 years—and the stage is set for unprecedented exit opportunities. Yet less than 5% of the 200,000 U.S. middle-market companies currently have private equity backing.

The opportunity is clear. The question is: Are you prepared to seize it?

The Four Pillars of Exit Readiness

1. Strategic Focus and Goal Alignment – Exit planning begins not with tactics but with clarity. What are you trying to achieve? Start by identifying your expected financial returns and timing. This isn’t merely about setting a number—it’s about understanding what that number represents in terms of your future security, legacy, and next chapter.
   
   Next, identify potential buyers. Strategic acquirers will value different aspects of your business than financial buyers. Private equity firms will scrutinize different metrics than family offices. Each potential exit path demands different preparation.
   
   Finally, determine optimal timing based on both business performance and market conditions. The strongest exits occur when internal readiness aligns with external opportunity—a convergence that rarely happens by accident.
   
2. Exit Preparation – Preparation isn’t a phase of the exit process—it is the process. Engage third-party resources early for valuation, legal, and tax advice. External perspective isn’t a luxury; it’s a necessity for navigating the complexities of transaction structures and their implications.
   
   The convergence of secondary market liquidity and middle market attractiveness creates a rare window of opportunity for business owners.Simultaneously, ensure all company documents, data, contracts, and financial statements are readily available and current. Nothing derails a transaction faster than disorganized or incomplete records. Buyers equate documentation gaps with operational deficiencies—a perception that directly impacts valuation.
   
3. Leverage Key Value Drivers – Value isn’t just created—it’s perceived, articulated, and defended. Your company’s market position, reputation, and other intangibles often drive valuation premiums. These must be quantified and communicated effectively. Similarly, relevant financials and opportunities for future growth must be presented not as historical artifacts but as predictive indicators.
   
   A strong customer base and demonstrable competitive advantage aren’t merely operational achievements—they’re risk mitigators for potential buyers. And perhaps most critically, a management succession plan and strategy for retaining key employees assures that the business can thrive beyond your departure.
   
4. Process Considerations – The exit process itself creates vulnerabilities that must be managed proactively. How and when will you communicate with employees about the potential sale? Their involvement—or exclusion—from the process carries both operational and emotional implications. Similarly, buyers’ requests to contact customers must be handled with extreme care to prevent destabilizing relationships.
   
   Perhaps most challenging is managing the business while distracted by the sale. Performance dips during transaction processes are common—and costly. Finally, post-sale transition requirements, including working capital adjustments and potential earn-out issues, must be anticipated and negotiated with precision.

The Path Forward

The most successful exits aren’t reactive responses to unsolicited offers—they’re the culmination of deliberate, multi-year strategies. They begin with the end in mind, building value systematically toward a predetermined goal.

Companies like CXO Partners specialize in guiding middle market owners through this process—improving business operations and maximizing EBITDA while simultaneously developing an exit strategy focused on attaining the highest value for your business.

The decision to exit isn’t merely financial—it’s deeply personal. It represents the culmination of years, often decades, of work. It deserves the same strategic thought and careful execution that built your business in the first place.

The secondary market is evolving. Middle market opportunities are expanding. The question isn’t whether you’ll exit—it’s whether you’ll do so on your terms, with your goals secured, and your legacy intact.

The time to begin is now.

As CIOs begin assembling their 2026 budgets, CEOs and CFOs play a crucial role not only in approving line items but also in ensuring that the right priorities are funded and the wrong ones are not. The pace of technology change isn’t slowing down, and as you probably realize, 2026 won’t reward those who play it safe; it will reward those who prioritize the right tech bets at the right time. Before the spreadsheets are finalized, every CEO, CFO, and CIO should sit down and ask these five key questions:

Question # 1: Are We Still Funding Yesterday’s Priorities?

Many organizations continue to invest in legacy platforms, siloed tools, or tech debt projects simply because “they’re already in the plan.” But just because it made sense in 2023 or 2024 doesn’t mean it makes sense now. It is always necessary to be prepared to reprioritize, and 2026 will be a critical year to do so. Reassess every initiative against current business goals, market conditions, and customer expectations. If it’s not helping you grow, differentiate, or reduce major risk, it may be time to kill that project or at least postpone it.

Question # 2: Are We Budgeting for Speed and Adaptability, Not Just Stability?

It’s no longer about planning five years out; long-range planning is a thing of the past. It’s about how quickly your tech team can pivot in six months. Resilience now means agility. Prioritize funding to build and acquire modular platforms, low-code tools, integration layers, and architecture modernization. Invest in your ability to change direction fast, not just maintain the status quo.

Question #3: How Are We Investing in AI and Is It More Than Just Pilots?

You know it had to make this list. Every budget deck has a slide about AI but too many are just pilot projects or vague “AI innovation” initiatives with no ROI strategy. If you haven’t done an AI Readiness study or defined your AI/Business Strategy yet then this should be the first project you budget for in 2026.

Shift budget from experimentation to operationalization. Fund real use cases such as customer service and customer support automation, data-driven decision platforms, revenue forecasting, cybersecurity, and software development augmentation. Build the talent and infrastructure to make AI sustainable and not just flashy. Companies that have scaled AI beyond the pilot phase were 2.5x more likely to achieve significant ROI, according to a 2024 McKinsey Global Survey. That’s the difference between investing in future capability and burning through innovation budgets with little to show.

Question #4: Are We Overlooking the Human Side?

Talent, adoption, and upskilling are still the Achilles heel of most digital investments. You can have the best tech in the world, but if no one’s using it effectively, what’s the point? Also what are we doing to upskill and reskill our workforce in the context of the AI era.

Allocate budget for digital adoption platforms, user training, targeted upskilling and reskilling programs, and internal AI literacy programs. Create a line item that’s dedicated to change management and value realization.

Question #5: What Can We Stop Doing?

This will be a pivotal year to rethink not just what we’re funding, but why. 2026 should not just be about what to fund; it should also be about what to cut. Every CIO should come to the table with a list of “strategic subtractions.”

Build a “Project Stop List.” Cancel low ROI contracts, consolidate redundant vendors, automate manual work, and stop initiatives that lack strategic focus. Free up dollars for what will matter most.

The 2026 IT budget shouldn’t just be a simple continuation of this year; it should be a time to develop a strategic map to a more agile, AI-powered, and value-driven future. CEOs and CIOs who ask the right questions now will be the ones ahead of the pack next year.

A short conversation can save months of wasted spend or missed bets. You’ll leave with actionable next steps and a sharper 2026 budget story for your board and leadership team

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Alejandro Mainetto is a technology executive with over 20 years of experience leading IT organizations, digital transformations, and driving innovation for private and public companies.
Learn more about Alejandro.

Stabilizer, Transformer, or Bridge Builder –  Which Interim CIO Does Your Business Need Now?

You wouldn’t hire a CFO without understanding your financial strategy, so why is it that many companies hire an Interim CIO without knowing exactly what kind of tech leader they need?

In times of transition, whether it’s after a CIO exit, during a digital transformation, or post acquisition, it’s tempting to rush into filling the seat. But the Interim CIO shouldn’t be just a placeholder because in high-stakes moments, they can make or break your next chapter. Here’s how to avoid costly mistakes and choose the right interim tech leader for your situation.

5 Moments When an Interim CIO is Brought In

Before you hire, be clear about the “why” you are bringing in this executive. Most Interim CIOs are brought in during one of these five moments:

1. Leadership Gap After a CIO Exit: Whether planned or unplanned, the CIO role is vacant, and you need a leader now to manage teams, vendors, and strategy in the interim.
2. Digital/AI Transformation: There is a top-down, strategic mandate. Your business is actively trying to reinvent itself, enter a new market, or create a significant competitive advantage using technology (e.g., launching a new AI-powered service, a global ERP implementation, or a major e-commerce push). The goal is growth and reinvention. You need an interim leader who can architect and drive a massive, business-changing program.
3. Technology Modernization: This is a bottom-up, foundational need. Your business isn’t in crisis, but its growth is being slowed by its own technology. Systems are outdated, fragile, and create operational friction with a large amount of “tech debt.” The goal is stability and efficiency. You need an interim leader to stop the bleeding, assess the core infrastructure, and build a reliable foundation for the future.
4. Post-M&A Integration: You just acquired or merged and now need to quickly unify platforms, teams, vendors and security protocols.
5. Cyber Incident or Compliance Response: A breach, audit failure, or regulatory issue has exposed gaps. You need a steady hand to triage, stabilize, and remediate.

The Right Kind of Tech Leader

Once you’re clear on why you need an Interim CIO, the next critical step is figuring out what kind of leader best fits your moment. This is where some companies go wrong, and they look at impressive resumes from big brand logos and assume they have found the right fit, but the truth is, an Interim CIO who thrived in a Fortune 100 insurance firm may not be what your 300-person, PE-backed consumer brand needs. Experience alone isn’t enough; you need alignment.

The biggest question to ask is: Is this person the right fit for the mission? And does this person have the mindset and experience to deliver for what your situation demands?

To make the selection process easier, it helps to think of Interim CIOs in three distinct types, each aligned to a different kind of business need. Not every CIO is built for every situation, and matching the right profile to your company’s current stage is one of the most important decisions you can make.

The labels we’re about to use are just shorthand for the leadership styles and priorities that tend to show up in high-impact interim roles. There are certainly other variations, but these three cover the vast majority of scenarios I have seen along my career and in the field.

Three CIO Leadership Styles

• The Stabilizer: Ideal when things are chaotic, after a leadership departure, during an audit, or in a tech-debt-ridden environment. Their job is to keep the lights on, improve service levels, and build trust.
• The Transformer: Best for organizations undergoing major change, digital initiatives, cloud migrations, or aggressive modernization. They know how to drive large programs and bring executive stakeholders along.
• The Bridge Builder: Needed when you’re prepping the organization for a permanent CIO. They work on structure, org design, and strategic roadmaps so the new leader can hit the ground running.

Four Traits to Look For in a Great Interim CIO

When you’re interviewing or evaluating candidates, prioritize mission fit over resume polish and look for these four traits:

• Strategic Clarity: They can quickly zoom out to align tech with business outcomes, even in messy environments.
• Operational Discipline: They move fast and know what can’t break while you’re evolving. They have short-term priorities and a long-term view.
• Stakeholder Savvy: They can manage up, down, and across from board members to engineers, and from vendors to finance.
• Proven Playbook: They’ve done this before. They aren’t learning on your dime, and they’re applying tested frameworks and templates from day one.

CIO Red Flags

Too Infrastructure Focused: If all they talk about is networks, servers and data centers but not outcomes and alignment, they’re stuck in yesterday’s IT.

•  Lack of Cross-Functional Experience: Today’s CIO needs to work across finance, operations, marketing, HR, and product not just in the engineering tower.
• No Clear Handoff Plan: The best interim leaders work toward the day they’re no longer needed. They should build, document, and leave things better than they found them.

An Interim CIO isn’t just a technologist; they’re a business accelerator. If you hire the right person, they create momentum and clarity in your first 90 or 100 days. If you hire the wrong person, they can cost you time, money, and credibility.

If you’re hiring an Interim CIO, don’t settle for just someone to occupy the seat; hire an executive and operator who fits the stage your business is in. At CXO Partners, we specialize in matching mission-ready interim leaders to your unique situation. We can help you identify whether you need a Stabilizer, a Transformer, or a Bridge Builder to ensure your next chapter is a success.

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Alejandro Mainetto is a technology executive with over 20 years of experience  leading IT organizations, digital transformations, and driving innovation for private and public companies.
Learn more about Alejandro.

CXO Partners recently held a 1-hour live webinar on Cybersecurity Trends in Energy.

Experts Dennis Gilbert, Jr., (Fmr. CISO of Duke Energy, Exelon); Betsy Soehren Jones (Critical Infrastructure Security Consortium); Alex Santos (CEO, Fortess Information Security); and Steve Swick (CXO Partners; fmr. Chief Security Officer) joined moderator John Allen of CXO Partners to discuss issues keeping CISOs up at night, including:

• The Impact of the CrowdStrike Outage
• How we can do Cyber Resiliency Better
• Legacy architecture concerns
• Security and the C-Suite
  
  Here are 8 clips from the topics covered.

AP Networks established aggressive revenue growth and new market entry objectives for their products and solutions.

Challenges

• Achieve new organic growth for multiple products and services
• Structure and scale the organization for rapid software revenue growth
• Optimize sales and business development efforts, targeting new customers and markets.

Why PE Company CFOs Don’t Last

Nearly 80% Wash Out …and the Job Just Got Harder

One of the most difficult jobs in Finance is to be the CFO of a PE firm or a PE-backed company.  According to a Big 4 firm’s survey, turnover of CFOs in PE and PE-backed companies is notoriously high, reaching 80% in less than five years; half of whom are gone within three years. The reasons range from tough, refined overseers to general breakdowns in fundamentals, such as timely reporting, to CFOs who don’t move with actionable, strategic insights, and operational Impact. 

That’s the bad news. The worse news is the job just got harder due to shifts in PE activity.

Short Timelines, Big Expectations

By design, things move quickly in private equity. About a third of CFOs expect an exit for their company within 1-2 years, and a plurality for all concerned — investors and operators — is to complete a successful exit before 5 years. 

Chief among the CFO’s goals is to drive up the valuation of a company at the exit. Industry valuations can fluctuate but expectations are generally for an EBITDA multiple above 10 with higher multiples for software and technology. Much of that burden falls on the leadership and implemented programs of the CFO. 

Day to day, CFOs are expected to deliver the table stakes of good corporate stewardship via accurate numbers, timely financial reporting, solid internal controls, and compliance. On-point budgeting, smooth audit preparation, cash flow forecasting, and working capital management are all presumed to be standard. 

The audience to whom this information is provided is a coterie of sophisticated general partners, limited partners, management committees, and portfolio companies who are all finance data-centric. It is difficult to present one version of the truth to audiences of varying agendas. Add to that the pace and pressure of the PE environment, which is the stuff of legend. Expectations are to deliver 110%. When that standard is met, work is ratcheted up to deliver 120%.

PE is Hard and Getting Harder

Those pressures are standard in normal business cycles. The increased difficulty comes as the number of private equity deals has slowed. If there are no deals, there are no returns for investors, the raison d’etre of private equity firms.  

As a result, global private equity dry powder has rocketed to a record two and a half trillion dollars. The pile up of capital sitting on the sidelines and the scarcity of deals is creating pressure internally to put money to work. 

A tougher lending climate combined with higher interest rates means leverage is not as easy to come by as it was a few years ago. In addition, global uncertainty about where interest rates are headed, the specter of inflation, wars, supply chain challenges, a wildcard US presidential election, and stubbornly wide distances between where buyers and sellers are on valuations, volatility reigns.

CFOs as Stewards, Strategists, or Prognosticators?

The multitask art of wringing out costs, driving margins, and operating leverage, while juggling working capital in an uncertain business climate, and now, providing an accounting perspective to the analysis of investment opportunities, some of which may be outside the normal parameters of historic investment objectives and criteria, is a new requirement of CFOs.

CFOs suffer from a myriad of competing priorities, some of which can be influenced by the CFOs training and background.  Those who are more accounting infrastructure, process, controls and stewardship-oriented, perhaps due to their legacy as auditors tend to focus on financial and operational reporting. Those with a background a finance, investment banking, or FP&A background, may be more comfortable pursuing new opportunities, dealmaking, and strategy and less enamored with financial reporting, budgets, and compliance needs.

However, if the CFO is professionally oriented, they may retreat to more familiar tasks, despite good intentions to stretch into new areas.

Future Proofing

The finance chiefs are ultimately being asked to optimize the current business while developing the financial strategy to future proof organizations.  

Ostensibly this would be achieved by closely overseeing existing assets, collecting and tracking KPIs, managing capital allocation initiatives, optimizing working capital, and then informing investors on the health and performance of the company/portfolio companies. 

In addition, PE CFOs will contribute insights to investment models, the overall structure and intrinsic value of potential targets, optimize management and operational effectiveness post-investment all while delivering higher shareholder value with lower volatility.

All these elements, while also convincing PE firms to make the requisite investments in people, processes and systems, make this the toughest job in finance. 

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AI-powered security systems can ID and respond to threats at speeds that were once unimaginable. But there are risks.

Artificial intelligence is a game-changer in the world of cybersecurity. Its ability to analyze vast datasets, detect anomalies, and predict potential threats has revolutionized the way we protect our digital assets. AI-powered security systems can identify and respond to threats at speeds that were once unimaginable, making them a crucial component in our defense against cyberattacks.

However, with great power comes great responsibility. The deployment of AI in cybersecurity isn’t without its risks.

The challenge for CISOs is to walk the tightrope between mitigating AI risks while embracing innovation.

As a technology executive with over a decade of experience in the highly regulated fintech industry, I’ve witnessed firsthand the critical role that Chief Information Security Officers (CISOs) play in safeguarding sensitive data and ensuring the compliance of Fortune 10 companies.

CISOs can expect 70% of organizations to explore generative AI driven by the use of ChatGPT. Nearly all business leaders say their company is prioritizing at least one initiative related to AI systems in the near term, according to a recent PricewaterhouseCoopers’ report. Quoting Gartner analyst Frances Karamouzis, “Organizations will likely encounter a host of trust, risk, security, privacy, and ethical questions as they start to develop and deploy generative AI.”

The Promise and Perils of AI in Cybersecurity

First, CISOs need to be acutely aware of these risks in deploying AI:

• Complex Attack Vectors: AI can be exploited by cybercriminals to create more sophisticated and targeted attacks. An example of this is the recent data breach at TaskRabbit, where 3.75 million customers had their financial and personal data stolen. Analysts believe that an AI-enabled botnet was used, with the botnet slave machines executing a DDoS attack on TaskRabbit’s servers. This required a multifaceted mitigation approach, including strengthening TaskRabbit’s security infrastructure.
• Biased Data: Biased data from the internet and social media can lead to AI algorithms making prejudiced security decisions, resulting in false positives or negatives in threat detection. Consider the bias introduced by using data from the internet and social media which are limited in terms of coverage of the population. These shortcomings potentially limit the use of data from the internet for developing machine learning models that are applied to the general population and for specific groups.  Organizations must rectify this situation by implementing strategies to address biases in their training data, incorporating more diverse and representative sources, and continually monitoring the system’s performance to ensure fair and accurate threat assessments.
• Inadequate Human Oversight: Overreliance on AI can lead to complacency and neglect in human oversight, allowing threats to slip through the cracks. CISOs should invest in the training and upskilling of security personnel to ensure that humans remain in control and have a deep understanding of how these AI systems operate.
• Adversarial Attacks: Cybercriminals can use AI to launch adversarial attacks against security systems, tricking them into misclassifying malicious activities. CISOs need to work closely with AI experts and ethical hackers to uncover and address weaknesses in their AI-powered cybersecurity solutions.

The CISO’s Balancing Act: Mitigating AI Risks While Embracing Innovation

The integration of AI into cybersecurity requires a delicate balancing act for CISOs. On one hand, they must mitigate the risks posed by AI, and on the other, they should embrace its innovative potential to drive business growth. Here’s how CISOs can navigate this challenging terrain:

1. Assess and Mitigate Risks: The first step is to thoroughly assess the AI-powered cybersecurity solutions in place and identify potential vulnerabilities. CISOs should work closely with AI experts and white hat or ethical hackers to uncover and address weaknesses.
2. Implement Ethical AI Practices: By ensuring that AI models are built on unbiased data and are regularly audited, CISOs can reduce the risk of biased AI making flawed security decisions.
3. Promote Continuous Training: CISOs should invest in the training and upskilling of security personnel to better understand and manage AI-powered security systems. This ensures that humans remain in control and have a deep understanding of how these systems operate.
4. Encourage Collaboration: CISOs should foster collaboration with AI experts and the wider business community. By working together, they can develop robust cybersecurity strategies that take full advantage of AI’s capabilities while minimizing risks.
5. Stay Informed: The rapidly evolving nature of AI and cybersecurity demands constant vigilance. CISOs must stay informed about emerging threats and the latest advances in AI to adapt their strategies accordingly.

A New Era of Cybersecurity

AI is ushering in a new era for cybersecurity, presenting both unprecedented opportunities and intricate risks. CISOs, armed with their in-depth understanding of regulatory requirements and the unique needs of their organizations, are at the forefront of addressing these challenges. By meticulously assessing and mitigating AI risks, championing ethical AI practices, nurturing a culture of collaboration, and staying informed, CISOs can harness AI’s potential while fortifying their organizations against ever-advancing threats. The future of cybersecurity lies in the harmonious synergy of human expertise and artificial intelligence, and it’s the CISO’s responsibility to lead their organizations toward this promising horizon.