Winning Methods in Deal Sourcing: Texas Edition

Axial Founder & CEO Peter Lehrman recently presented at Rice University’s Entrepreneurship Through Acquisition Conference, where he outlined the realities of sourcing deals in the increasingly competitive lower middle market. Drawing on Axial’s state-specific deal data, Peter highlighted trends from the 12,000+ deals brought to market via Axial over the past 12 months, specifically the 8% that originated in Texas, the home state of this year’s conference.

Today’s article features insights and Axial’s proprietary data from the presentation, including a breakdown of the three pillars to building a repeatable, credible, and compounding sourcing engine. A full recording of the presentation is included below for those who want to watch the session in its entirety.

Navigating The LMM Landscape: ~12,000 Axial Deals in the Last 12 Months, 8% in Texas

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Florida, California, & Texas Rank As The Top 3 States For Dealflow

The data points to a meaningful concentration of lower middle market activity in a handful of states. Roughly one-third of all marketed deals over the past 12 months came from Florida, California, and Texas. Florida led with 1,894 deals, followed by California at 1,212. Texas ranked third with 1,002 deals, accounting for 8.32% of total national deal volume. 

The following two charts highlight how Texas’s deal activity and investor interest have continued to accelerate year over year.

Texas Deal Activity is Expanding (+20% YoY)

Texas Deals YoY

Investor Interest in Texas Continues To Grow

Investors Pursuing 1+ Texas Deals

Together, these trends illustrate a market that is not only large but also accelerating. Texas has seen steady year-over-year growth in both the number of deals brought to market and the number of investors actively pursuing opportunities in the state. With deal volume projected to surpass 1,000 in 2025 and investor pursuits expected to nearly triple compared to 2022, the momentum in Texas continues to build.

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Texas Supply & Demand: Mismatches Guide Buyers’ Investment Theses

Sector-level mismatches add another layer of complexity to the Texas market. Some categories, like Industrials and Business Services, see strong alignment between deal flow and investor demand, while others show meaningful gaps — with Food & Hospitality and Consumer Goods generating plenty of deals but attracting far fewer buyers. These imbalances shape where competition intensifies and where quieter, less-contested opportunities may sit beneath the surface.

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A Crowded Market: 3000+ M&A Intermediaries; ~10% Annual Turnover

This long-tail distribution is what makes sourcing in the lower middle market so challenging. A small fraction of firms drive meaningful volume, but the majority of deals sit with hundreds of small, low-visibility advisors. Because each tier behaves differently — in experience level, online presence, and responsiveness — buyers can’t use a one-size-fits-all approach. The sourcing strategy must adapt to the structure of the market.

Winning Requires Smarter Territory Design

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Texas Intermediary Participation: 254 Active in Last 12 Months

Half the Intermediaries Marketing Deals in Texas Are Based Out of State

Intermediaries Marketing Deals in Texas

The Texas data shows a market with plenty of activity, but also a meaningful imbalance. Deal volume is rising, investor interest is growing even faster, and supply and demand vary widely by sector. Yet most deals are represented by small, low-volume advisors, and nearly half come from firms based outside the state. Simply being “active” in Texas doesn’t guarantee coverage; the opportunities are too dispersed, and the landscape is too uneven for informal or relationship-only sourcing to keep up.

For buyers, that mix of growth and fragmentation creates both a challenge and an opportunity. Those who rely on familiarity or a narrow set of broker relationships risk missing large portions of the market, while those who bring structure and discipline consistently surface more relevant opportunities. It’s in this context that the three pillars of effective deal sourcing become so important: they provide a framework for building coverage, establishing trust, and uncovering deals that many others never see.

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Recent Transactions in Texas

The Three Pillars Behind A Winning Deal Sourcing Engine

Beyond the Texas activity data, Peter’s presentation also covered deal-sourcing best practices for the Rice ETA audience. The state-level trends help illustrate the landscape, but the real takeaway is that every buyer faces the same core challenge: a fragmented market where deals are widely dispersed and not always easy to find. Understanding the data is only part of the equation; building a system to surface and pursue opportunities consistently is what drives results. That’s where the three pillars behind a winning deal-sourcing engine come into play.

Pillar 1 → Memorable Online Narrative

A strong online narrative has become a foundational element of modern deal sourcing. In a market where brokers and sellers routinely vet buyers long before a conversation begins, clarity and visibility matter. The most effective acquirers make it immediately obvious who they are, what they’re looking for, and why they’re credible.

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Positioning That Resonates: Memorable Narratives Drive Inbound Deal Flow

When your narrative is specific and memorable, it does a lot of the work for you. Advisors and owners quickly understand what you’re looking for, what you’ve done, and why you might be the right home for a particular business. Clear positioning like this doesn’t just build credibility, it drives the kind of inbound conversations that make sourcing more efficient and far more effective.

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Turn Expertise Into Credibility: Building Digital Presence Through Thought Leadership

Thoughtful, consistent content is one of the fastest ways for buyers to build credibility in a crowded market. Sharing clear points of view, sector insights, or lessons learned gives sellers and advisors a sense of how you think and operate — before you ever meet. A well-developed content library like this signals professionalism, preparation, and a long-term commitment to the craft of acquiring and growing businesses.

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Be Memorable.

Being memorable doesn’t require a huge following or a marketing team. What matters is showing personality, point of view, and momentum in a way that sticks with the people who might bring you a deal. When advisors and sellers scroll past dozens of similar profiles every day, the buyers who stand out are the ones who share something distinct — a story, an insight, or an update that signals who they are and how they operate. The goal isn’t polish for its own sake; it’s to make yourself easy to recall when the right opportunity crosses someone’s desk.

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Be Discoverable.

Being discoverable matters just as much as being memorable. When advisors or owners search for buyers, the Axial directory consistently ranks at the top of Google search results and receives more than 1 million visitors each year. Axial member profiles allow buyers to showcase their criteria, track record, and recent successes in one place, giving them an immediate advantage in communicating who they are.

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76% of Closed Deals Sourced via Axial Had a Buyer Prioritize Their Online Narrative

Whether through a well-built website, a clear LinkedIn presence, or discoverability in platforms like Axial’s search fund directory, a polished digital footprint creates familiarity and trust. It also increases the likelihood of being proactively shown relevant opportunities, especially in niche industries where advisors rely on memory and pattern recognition. A memorable narrative doesn’t require a large team or a long track record; it simply requires intentionality and consistency.

Pillar 2 → Credibility & Reputation

Beyond visibility, buyers also need to demonstrate that they can be trusted with a seller’s time and with their transaction. In a market where brokers are selective, and sellers often have limited M&A experience, credibility becomes a deciding factor in who gets access to opportunities and who doesn’t.

Don’t Let Your Wins Go Quiet: Turn Milestones Into Marketing Momentum

Milestones like acquisitions, expansions, or key hires are natural credibility builders, but only if people know they happened. Sharing these moments publicly helps reinforce momentum and signals to advisors and sellers that you are active, capable, and committed. Even small announcements can widen your footprint and keep you top of mind when new opportunities emerge.

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Reputation is Built Brick by Brick: Accolades & Appearances Add Up

Visibility compounds when it comes from different directions. League tables, interviews, podcasts, blog posts, and industry spotlights all send small but meaningful signals about who you are and how you operate. None of these on their own drives deal flow, but together they build familiarity and trust, making it far more likely that an advisor thinks of you when the right opportunity comes across their desk.

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You Must Earn the Attention of Sellers & Their Brokers

Sellers and their brokers are selective about who sees their deals, and that selectivity varies widely. While some opportunities are sent broadly, many often go to a much smaller group of recipients. Earning a spot in that smaller group depends heavily on how clearly and credibly a buyer presents themselves.

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55% of Buyside Inquiries Resulted in Access to Initially Narrow Deals

The acceptance data makes one thing clear: thoughtful outreach works. More than half of all buyside inquiries result in access to deals that were initially narrow or competitive, which shows that sellers and advisors are willing to expand the circle when the message resonates. The question, then, is what actually drives that resonance? The analysis below highlights the themes that consistently correlate with higher acceptance rates.

Analysis of 8,600+ Buyside Inquiries Reveals Clear Themes Correlated with Success

Reputation develops gradually, through small, consistent signals like public milestones, thoughtful communication, and transparent deal history. These actions help buyers stand out in a crowded market and give sellers confidence that the process will be handled professionally. Over time, credibility compounds, strengthening a buyer’s ability to earn introductions and gain access to higher-quality opportunities.

Pillar 3 → Data-Driven & Software-Enabled

The third pillar reflects how much the sourcing environment has evolved. While relationships still matter, they’re no longer the only way to build a pipeline. Today’s buyers rely on data, software, and structured workflows to identify opportunities and stay organized across thousands of potential touchpoints.

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Data and Software Enable Smart Outbound Sourcing

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Resist The Automation Temptation!

Bad outreach isn’t just ineffective; it closes doors. Generic, automated emails signal that the buyer hasn’t done the work, and the recipient will pick up on that instantly. The flip side is also true: when a message is thoughtful, specific, and rooted in a clear investment thesis, it stands out immediately. That’s the kind of customization that earns attention and opens real conversations, as the next example shows.

Customization + A Credible Thesis is the Way to Reach Off-Market Owners

The tools now available make broad coverage more achievable, but they also require discipline. Effectiveness comes from using these systems to support customization and thoughtfulness, not to automate generic outreach. When applied well, technology helps buyers reach more advisers, uncover overlooked opportunities, and operate with greater precision. In a market defined by fragmentation, this kind of structure allows buyers to cast a wider net without sacrificing quality.

Texas Search Fund Case Studies

Taken together, the three pillars form a practical roadmap for sourcing in a market defined by fragmentation, competition, and increasingly digital first impressions. They also help explain why some buyers consistently outperform others despite operating in the same crowded landscape. To illustrate how these principles show up in the real world, the following case studies highlight Texas acquirers who applied elements of this framework — from refining their online narrative to leveraging data and outbound tools — and successfully navigated the lower middle market to complete meaningful acquisitions. These examples demonstrate that even in a challenging environment, disciplined sourcing methods can create clear paths to high-quality opportunities.

From Private Equity to Search Fund Entrepreneur: Growing a Texas Turf Business

After starting his career in private equity and investment banking at Peak Rock Capital and J.P. Morgan, Johannes Hock founded Silvaner Capital, a search fund focused on acquiring, operating, and growing a small business in Texas.

Johannes joined Axial and, within one year, acquired DFW Turf Solutions, a leading provider of artificial turf installation services. The acquisition launched Johannes’ transition to owner-operator in the landscaping industry. Within two years, Johannes grew the business from $5M to $20M revenue and 3+ states through organic growth and additional acquisitions.

Building a Texas Steel Company Through an Entrepreneurial Acquisition

After more than a decade in financial services and operating company roles, Timothy Andres founded Too Sharpe Capital, an entrepreneurial acquisition firm committed to partnering with and acquiring a successful small business.

In April 2024, Too Sharpe Capital joined Axial to source acquisition opportunities. Within two months, Timothy received the opportunity to acquire Lamberts Ironworks, a Texas-based custom steel fabrication company. He signed a letter of intent in July and successfully closed the acquisition in November 2024, assuming the role of CEO.

Final Thoughts

The Texas lower middle market is rich with opportunity, but it’s also fragmented, competitive, and shaped by fast-moving investor interest. With most deals represented by small advisors — and many marketed from outside the state — relying on limited networks or ad-hoc processes leaves buyers exposed to blind spots.

The three pillars offer a clear way to navigate this landscape. A memorable online narrative makes buyers easy to understand and easy to remember. Credibility and reputation help earn access when brokers and sellers are selective. And a data-driven, software-enabled workflow provides the structure needed to cover far more ground without sacrificing personalization.

Together, these methods reflect how top acquirers consistently find and win opportunities. Buyers who invest early in a repeatable sourcing engine will be better positioned to broaden their coverage, build stronger relationships, and compete effectively for the right deals.