In today’s rapidly consolidating insurance landscape, mid-sized brokerage firms face a unique set of challenges. Competitive pressures are intensifying, access to growth capital is increasingly constrained, and the operational demands of scale—technology, talent, and carrier relationships—are becoming harder to meet independently.
For many firm owners, the instinct is to preserve independence at all costs. But what if the traditional notion of “selling” a firm is due for a rethink?
The capital challenge
Whether the goal is to invest in technology, expand into new markets, recruit top talent, or pursue strategic acquisitions, the capital required is substantial—and not easily accessible. Brokerages generating under $20 million in annual revenue often find themselves at a disadvantage when seeking capital because lenders tend to favor larger firms with broader balance sheets. In addition, equity investors often seek control and scale, and their involvement can lead to dilution and misalignment. For mid-sized firms, this creates a capital barrier that can stall growth and limit strategic flexibility at a time when this middle tier of the market—firms in the $500K to $10M revenue range—is under increasing strain. These firms frequently lack the scale to compete effectively on operational efficiency, digital capabilities, and carrier leverage. Meanwhile, smaller firms are being absorbed or reinvented, and larger firms continue to grow through aggressive acquisition strategies.
The prolonged hard market has masked some of these challenges, with premium increases driving top-line growth. But as rate stabilization looms, firms will need to rely on business-driven strategies rather than market-driven tailwinds. Without access to capital, many will struggle to adapt.
A strategic alternative: selling in, not selling out
For brokerage owners who find traditional capital routes closed or misaligned, partnering with a larger organization may offer a compelling solution. This is not about relinquishing control or retiring early—it’s about selling in, not selling out.
Many strategic buyers today offer partnership models that preserve autonomy, brand identity, and operational leadership. These arrangements provide access to capital, technology platforms, recruiting support, and enhanced carrier relationships—while allowing the acquired firm to maintain its culture and client focus. In some cases, these partnerships are not publicly disclosed, allowing firms to operate with the appearance of independence while benefiting from the resources of a larger enterprise.
Case in point: a western U.S. brokerage’s growth journey
Consider the example of a well-regarded brokerage in the western United States. With approximately $7 million in revenue and a lean, high-performing team, the firm had built a strong reputation and valued its independence. Yet, growth was becoming increasingly difficult. Recruiting was a challenge, capital was limited, and larger competitors were encroaching.
After a strategic evaluation, the firm discovered a range of potential buyers offering partnership-oriented structures. One such deal allowed the firm to retain its name, leadership, and day-to-day operations—while gaining access to capital, technology, and strategic guidance. Today, the firm has expanded significantly, leveraging its partner’s resources while maintaining the identity and autonomy that made it successful.
Conclusion: a new lens on growth
Selling a brokerage does not have to signal the end of independence. In many cases, it can be the beginning of a more empowered, strategically supported future. For mid-sized firms facing capital constraints and competitive headwinds, partnering with a larger organization may be the most effective path to sustainable growth.
It’s time to rethink what it means to sell. In the right structure, it’s not a retreat—it’s a strategic advance.
