Middle Market Deals and What I'm Seeing

We're starting to see a trend in the investor's appetite for new deal flow, specifically, sound middle to late market companies. A good percentage of the investors listed on the Capital MatchPoint are seeking middle market firms and the demand thus far is outstripping the inventory of these types of companies. That's not to say they're not out there, but an huge request for them indicates these firms are not seeking investments and seem to be laying low and weathering out the storm by sitting on cash.
However, if indeed this is the majority of cases, hoarding cash is nearly as bad as spending it profligately. Cash returns are woeful and many firms may be sitting on cash reserves that demand less than a passing interest from investment houses, hence the dearth of middle market companies seeking it.
There may come a day very soon when these cash reserves may entice management to seek out weaker rivals and make impetuous decisions. If public, wouldn't it be prudent to re-purchase their stock while their valuations are as lo or lower than they've been in recent memory? If not, the cash balances would continue to grow while the economy continues to contract.
So, do they need an outside influx of capital? Maybe not. Is the competitive landscape for firms seeking this type of capital becoming more acute? We say yes, judging by the investor corps on our site. This may certainly be a small microcosm of the situation at large, but there is something behind the demand for these firms and the lack of discovering the really good ones.