How the J-Curve Trap Sinks M&A Returns

Lucas and Luna unpack a classic private-equity pitfall: the J-curve trap. Using the 2019 acquisition of a mid-market industrial coatings company as a case study, they explain how buyers overpay for turnarounds by underestimating the capital required to restructure operations. The hosts walk through how one deal — backed by a respected middle-market sponsor — collapsed when working capital needs ballooned 40 percent above projections. They contrast disciplined earnout structures that protect buyers with vague 'transformation budgets' that hide risk. The episode also covers how sellers can structure deals to capture full value without triggering buyer regret. A practical breakdown for operators and founders navigating M&A in mid-2026. #MergersAndAcquisitions #PrivateEquity #JCurve #TurnaroundDeals #Earnout #WorkingCapital #IndustrialCoatings #MiddleMarket #DealStructure #Mistakes #FounderExit #Business #Finance #FexingoBusiness #BusinessPodcast #DueDiligence #CashFlow #EBITDA Keep every episode free: buymeacoffee.com/fexingo