A lack of preparedness has led to the delay, restructuring or cancellation of deals for more than one in four private companies, with cybersecurity and technical debt emerging as key barriers.
New York, New York--(Newsfile Corp. - November 9, 2026) - As 58% of private company leaders report changes to their expected liquidity timelines, only 21% are preparing for multiple transaction paths, according to new research from KPMG LLP, the U.S. audit, tax and advisory firm.
The report, "Exit optionality: Strategic agility for private companies," surveyed 301 senior corporate decision-makers at privately held U.S. companies in the third quarter of 2026, finding that while high-profile IPOs can suggest a more active exit environment, the experience across the broader private market is more uneven. Against that backdrop, companies that have prepared for only one exit path can find themselves with limited options when timelines or market conditions change.
The consequences are already showing up in transactions. More than one in four (26%) private companies have had a deal delayed, restructured or canceled because of an unexpected readiness gap. Among those companies, lower valuations or reduced proceeds were the most common impact (22%), followed by extended holding periods (17%) and higher transaction advisory fees (13%). The gaps surfacing in diligence increasingly extend beyond traditional financial readiness: 37% faced heavy cybersecurity scrutiny during liquidity discussions, while 33% said technical debt became an explicit issue during due diligence.
"There are a lot of companies sitting on the sidelines waiting for the perfect market window, but volatility isn't going away," said Shari Mager, KPMG Private Emerging Growth Advisory Leader, KPMG US, and Global Capital Markets Readiness Leader. "The companies that are best positioned are doing the work well before they know exactly when or how they'll exit. That preparation gives them the ability to act when the right opportunity emerges."
Multiple Exit Paths, but Limited Flexibility
Private companies are considering a range of liquidity options, including strategic sales (43%), sales to private equity investors (34%), majority recapitalizations (18%) and traditional IPOs (16%). But considering different options is not the same as being prepared to pursue them. Less than half (48%) are confident they could shift to an alternative path without material delay, additional cost or valuation loss.
Optionality Depends on More Than Financials
The ability to pursue an alternative path depends in part on how well the functions involved in a transaction can move together. Yet, only 15% of private companies said their audit, tax, legal, technology and financial workstreams are fully integrated from the outset. And while 64% report being mostly or fully prepared in tax structure, compliance and supporting documentation, day-to-day compliance alone may not position a company to move quickly when a transaction takes shape.
In an unpredictable transaction environment, companies may not be able to control when the market moves, but they can control how many paths they are prepared to pursue. For more information, visit KPMG Private.
About KPMG LLP
KPMG LLP is the U.S. member firm of the KPMG global organization of independent member firms providing audit, tax and advisory services. The KPMG global organization operates in 138 countries and territories and has more than 276,000 people working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.
KPMG is widely recognized for being a great place to work and build a career. Our people share a sense of purpose in the work we do, and a strong commitment to increasing access to education and opportunity, advancing mental health, and supporting community vitality. Learn more at www.kpmg.com/us.
Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities.
###
Media Contact
Michael Hoppe
michaelhoppe@kpmg.com
657-836-2114
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/322959
