How Private Equity Values Your Business

About the Episode

 Stop guessing what your business is worth and start understanding what dictates your sale price. This episode reveals how private equity firms categorize companies by EBITDA and why the lower middle market is currently the goldmine for savvy sellers. Learn how to position your company as a high-value platform or a strategic add-on to secure the best possible deal.

For every dollar of earnings I’m paying five bucks for, I’m getting 14 dollars for that same dollar of earnings on exit. I’m making a nine-times arbitrage.

Adam Coffey

What You’ll Learn

• How Private Equity Determines Value: You will understand how fund size dictates which firms can buy your business and why moving up a tier in EBITDA can exponentially increase your exit multiple through arbitrage.
• The Difference Between A Platform And An Add-On: Learn why businesses earning under $4 million in EBITDA are often better off as add-ons to avoid the intense corporate pressure that comes with being a platform investment.
• The Lower-Middle Market Offers The Highest Returns For Sellers: Discover why heavy market fragmentation and lower entry multiples in the $5 million to $15 million revenue range create a massive opportunity for multiple expansion.
• How To Vet Private Equity Partners: Understand why 73% of founders don’t last five years post-sale and how to interview a firm’s “divorced” CEOs to ensure your legacy and employees are protected.
• How To Use In Your Sale: Learn to use debt as a tool for diversification and why the timing of a fund’s lifecycle can trigger a quick, high-profit exit for you as a rollover investor.

Topics Covered

Want More? Related Resources:

• What’s a ‘Main Street’ vs. a Middle-Market Company?
• EBITDA | Definition, Formula & Example – A Complete Guide
• M&A Guide | The 4 Types of Buyers of Businesses

Meet Our Guest

Adam Coffey

Founding Partner, The Chairman Group | Dallas, Texas

Visionary empire builder, CEO coach, top 1% speaker, and four-time #1 bestselling author Adam Coffey builds high-performance cultures that drive transformative exponential growth. Adam is a founding partner of The Chairman Group, where he shares his expertise to help other CEOs and C-suite executives, private equity firms, founders, business owners, and entrepreneurs succeed and drive transformative growth.

LinkedIn: https://www.linkedin.com/in/adamecoffey/