At the Milken Institute Global Conference on May 6, Patrick Flood, Founder & CEO of Owners In Honor, took part in a discussion that keeps coming up in veteran entrepreneurship: if there’s so much capital in the American economy, why do veterans and military families still struggle to reach it?
The Milken Institute’s own research offers part of the answer. Veteran entrepreneurs seek financing at rates similar to their civilian peers — yet they see lower approval rates, larger financing shortfalls, and disadvantages tied to financial networks and credit history. But the real story isn’t a shortage of capital. Banks, SBA lending, investment funds, family offices, and foundations already exist in abundance. What’s missing is the architecture that connects the right operator, business, and capital source at the right moment.
Why Entrepreneurship Through Acquisition Matters Here
Much of the veteran business conversation defaults to startups and venture capital. But most veteran-owned business activity happens on Main Street and in the lower middle market — where the real questions are about commercial lending, acquisition, working capital, and succession, not pitch decks.
Entrepreneurship Through Acquisition (ETA) offers a different path. A veteran doesn’t need to invent a new technology — they can acquire an existing business with customers, employees, and revenue already in place. The challenge becomes finding a qualified operator, structuring the deal, and assembling capital to move the business from one steward to the next.
This matters right now because America is approaching what the Milken Institute calls a “Great Ownership Transition” — millions of business owners aging toward retirement. At the same time, veterans owned an estimated 261,000 employer firms in 2023, generating roughly $1 trillion in annual receipts. One generation is preparing to exit. Another has the leadership experience to take the reins.
SBA Lending: Essential, But Not the Whole Answer
SBA 7(a) loans remain one of the most practical tools for a veteran acquiring an existing business. But program availability doesn’t make a deal financeable — the lender still needs to believe the business can service the debt, the buyer needs sufficient equity, and the deal structure has to hold up. Federal Reserve data shows how much personal risk is already baked in: among veteran-owned firms carrying debt, 64% report using a personal guarantee and 48% report pledging personal assets.
The real question isn’t whether SBA loans exist. It’s whether the operator, business, seller, lender, and deal structure are all ready at the same time.
The “Missing Middle” in Veteran Business Finance
As deals grow larger, SBA debt and seller financing eventually aren’t enough. A business valued somewhere in the $5–25 million range often falls into a gap — too big for the most accessible small-business financing tools, not yet large enough to attract institutional capital at scale. Flood calls this the missing middle, and it’s where family offices, SBICs, and mission-aligned investors can play a critical role — especially when their investment horizon supports long-term stewardship rather than a quick exit.
Military Families Face an Added Layer
Military spouses and families encounter the same financing barriers, compounded by relocation. Traditional lending rewards continuity — long banking relationships, stable networks, consistent local history. Military life disrupts exactly that. The capital ecosystem needs to get better at distinguishing between instability and mobility that comes from service, not treating one as the other.
Ownership, Stewardship, and Community Stability
Access to capital is ultimately access to ownership — and ownership carries weight beyond the balance sheet. Business owners sit on boards, sponsor local teams, employ neighbors, and become part of the institutional fabric of their communities. A broad base of ownership keeps economic decision-making distributed rather than concentrated. As the current generation of owners exits, the question isn’t just who buys these businesses — it’s whether veterans get a real seat at that table.
From Access to Architecture
The veteran entrepreneurship ecosystem has spent years identifying the barriers. The next step is building the infrastructure that helps entrepreneurs move through them — identifying capable operators before they need capital, preparing business owners years ahead of retirement, and connecting acquisition entrepreneurs with the accountants, attorneys, lenders, and advisers that institutional buyers already have on speed dial.
Capital should follow the full arc of a business’s life — from first financing, through acquisition, through growth, through the next succession. That’s the opportunity Flood sees in convening institutions like Milken alongside banks, veteran organizations, and operators: not just funding more deals, but preserving enterprise value through generational transition and giving veterans a durable path to ownership.
Read Patrick’s full essay, “The Milken Opportunity: Ownership, Stewardship, and Democratic Stability,” on LinkedIn →
https://www.linkedin.com/pulse/veteran-access-capital-milken-opportunity-ownership-democratic-flood-rbtzc/
