The "Silver Tsunami:" Main Street’s Tidal Wave of Transition

Exploring the Impact of Private Business Transitions

---

With approximately 200,000 middle-market companies in the U.S. — many of them owned by baby boomers approaching retirement — a significant wave of business transitions is expected, representing an unprecedented transfer of company value in the coming years.

Some scholars have referred to this coming wave of transition as the “silver tsunami.” While large public corporations tend to dominate business media and academic research, they actually represent only a small share of overall all economic activity. In contrast, more than 130 million people in the United States work for employers with fewer than 100 employees, and 33 million small businesses in the country account for more than 99% of all registered businesses.

What This Means for the Future

The coming wave of ownership transitions — coupled with the growing influence of private equity in lower-middle-market to middle-market companies — raises important questions about what these businesses are becoming and how these significant shifts will affect the economy and the communities they serve.

Inside the Olin Brookings Commission’s Work

---

Questions around this wave of transition formed the crux of the 2023–2024 Olin Brookings Commission’s final project, capping a series of three projects done in this kind of collaboration. The Commission convened a diverse panel of experts representing business owners, private equity firms, antitrust regulators, and business strategists from WashU Olin Business School, the Brookings Institution and beyond.

Their work involved examining issues such as:

• The landscape of transition, including the relative benefits of various transition types.
• The financial and nonfinancial outcomes of different transition forms (e.g., bankruptcy rates, quality jobs provided, capital retention within communities).
• The policy landscape and broader cultural forces affecting transition.

Findings and Recommendations

On October 8th, 2024, the Olin Brookings Commission presented its final report — titled "The Tidal Wave of Transitions on Main Street" — and recommendations at the Brookings Institution in Washington, D.C.

Findings and recommendations included:

• Identifying strategies used by distinct investors in the small business market.
• Codifying how owners navigate trade-offs in business ownership transitions.
• Clarifying how various ownership structures impact workers in these firms.
• Highlighting key policy implications based on these findings.