Dealing with Sellers in the Lower Middle Market/Middle Market

Most sellers that are interested in having a discussion are 1 to 5 years away from actually selling. They either are waiting for a strategic buyer or simply need to grow a few more years to hit a target valuation to be in line with the lower middle market/middle market valuation spectrum:

$500k to <$1m is 4x

$1m is 5x

$1m to $2m is 6x

>$2m is 7x Since sellers are likely a few years away even if you get a fee agreement in place, getting questions answered and a buyer/seller call will take time. Sometimes a year. Patience is the key here as m&a operates on an entirely different timeline that the rest of business. A business owner will sell his business once in a lifetime so 3 to 5 years is about the standard for an exit once he responds that he would be willing to take an offer on his business.