When I first got into M&A and being an executive leader, the 2008 financial crash had just happened. At the time it felt scary and unnerving. But they were also, in hindsight, relatively predictable markets. What you knew in January you largely still knew in September. Deals moved along recognizable rails. Risk could be mapped.

That world feels like child’s play compared to where we now find ourselves.

We are operating inside a market of endless noise, economic mixed signals, and a constant stream of contradictory messages. The potentially sustained high price of oil. The threat of a greater Middle East conflict compounding inflationary pressure. A lingering question of whether AI presents a market bubble of historic proportions. And underneath all of it, a changing international order that nobody has a clean model for.

The data reflects the distortion. Global M&A deal values rose 36% between 2024 and 2025…yet deal volumes climbed just 1%. That gap tells the real story: the recovery is concentrated at the very top. Megadeals are booming. The mid-market is active yet complex. We are operating in uncharted territory where closing deals is harder than ever, and the skillset that carried investment bankers and M&A professionals through the last twenty years is no longer sufficient on its own.

Here are the new rules of M&A, in my opinion.

RULE One

Uncertainty is here to stay.

What this means is that closing deals requires more…more of everything. More creativity, more in-depth understanding of the people on both sides of the table, more awareness of what can go wrong and, most importantly, the ability to navigate it all. The past was relatively smooth sailing. We are now sailing in a gale-force storm in the middle of the ocean. The stakes are higher and mistakes cause real issues and dead deals for clients.

RULE Two

Complexity is a given.

Financials, transaction requirements, lending requirements, capital requirements, seller expectations and buyer mandates are all more complex due to a more complex landscape. KPMG’s 2025 M&A study found that agreeing on valuation (44%), completing due diligence (41%), and navigating regulatory requirements (41%) were the three leading obstacles to closing a deal. These are not edge cases. They are the deal. Complexity requires experience, creativity and a serious commitment to push through sustained deal headwinds.

RULE Three

Managing the psychological health of the parties involved is paramount.

Why? Because people are weary, on edge, and the guards are up on both sides of the table. CEO confidence in the mid-market dropped from 60% in early 2025 to just 34% by Q2, and while it recovered somewhat by year-end, it never climbed back into positive territory. That exhaustion is not a soft observation…it is a material fact that shapes how deals move and whether they close. Managing the psychological arc of a transaction is now as important as managing the financial arc and is one that few M&A professionals understand or think about. We closed a deal (actually closing as of today) where an impactful element of our role as the buyer representative was to ensure that the seller felt psychologically safe as we had to re-trade the deal twice before it was completed. Without this understanding, the deal would have likely collapsed a few times.

RULE Four

The market is K-shaped. Know which half you’re in.

The headline numbers flatter what is actually a bifurcated market. Megadeals are flourishing. Mid-market volumes remain suppressed…weighed down by persistent valuation gaps, tighter financing conditions, and cautious buyers who have learned to walk the moment a process produces surprises. This is not a temporary cycle; it is a structural reality that is here to stay. Mid-market M&A advisors who are positioning themselves as though they’re competing on the same playing field as the bulge brackets (or even sub $5m deals) are operating on a false map. Our market requires its own playbook…more targeted buyer universes, more bespoke structures, a more intimate and human process and a comprehensive of M&A at a micro and technical level. Understanding the terrain you are actually standing on is the beginning of everything.

RULE Five

Preparation is a deal variable, not a pre-deal nicety.

Between 70% and 90% of mid-market M&A deals fail, and inadequate due diligence is consistently identified as a primary cause. That number should stop everyone in this industry cold. In today’s market, buyers are walking mid-process the moment they encounter one too many surprises in a data room. Clean financials, a defensible narrative, and a prepared management team are not differentiators…they are the price of admission. Sellers who arrive unprepared are not just leaving money on the table; they are actively building conditions for a broken deal. Great advisors now front-load the work that used to happen later. The most successful transactions in this environment are the ones where the preparation was done as early as possible before the process began.

RULE Six

Compensation structures need to be aligned.

Gone are the days of simple, quick deals where a success fee only could generate strong results. Mid-market deals now require more hours, more commitment, more horsepower, the ability to push hard when a deal gets difficult…and they always get difficult now…and the capacity to deploy significant resources. None of that is feasible under old-school compensation structures. This is not a business development conversation. It is a quality-of-outcome conversation for every buyer and seller reading this document.

RULE Seven

Humility.

Not humility as performance, but as genuine operating posture. Markets this volatile will expose overconfidence quickly and mercilessly. The advisors who can say “I don’t know, but here is how we will find out” …and mean it and follow through…are the ones building the most durable relationships right now. Certainty is a costume. Humility is a capability.

RULE Eight

Creativity.

The playbook that worked in stable markets regularly fails in unstable ones. Deal structures that close today look different…more bespoke, more tailored to the specific anxieties and incentives of the parties sitting across from each other. Private equity sponsors have increasingly turned to continuation vehicles, hybrid financing, and non-traditional earnout arrangements to get transactions done where conventional structures would have stalled entirely. The advisors who can construct creative paths forward, rather than defaulting to precedent, are the ones whose clients actually reach a closing table.

The zero-sum game no longer works in mid-market M&A. It probably never truly did but in forgiving markets, it could be disguised. Today’s environment strips that disguise away completely. AI further compounds this. Deals get done when M&A advisors / investment bankers are genuinely invested in outcomes for both sides, when they bring enough creativity, technical knowledge of closing deals and deep psychological awareness to hold a process together under pressure, and when their economic model actually allows them to do the work the moment demands.

This is not a pessimistic view of our industry. It is an honest one. The M&A advisors who adapt to these new rules will do the best work of their careers. The ones who don’t will find the market has quietly moved on without them.

For us at RWT, we are pushing forward with these new rules of M&A being our premise and we are very bullish to where the mid-market can go, however we are under no illusions that the conditions requiring the new rules of M&A are anything other than here to stay.

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