Aggregated benchmarks from 12,000+ lower middle market transactions, $2M–$50M enterprise value. Updated quarterly. Built for founders, operators, and intermediaries who want institutional truth — not anecdote.
The single largest valuation lever isn't your revenue — it's the multiple buyers attach to it. Multiples below are TTM EBITDA, all-cash equivalent, lower middle market transactions.
Top-quartile multiples are 1.8–2.4× the median in every sector. The gap is almost entirely operational — readiness, durability, and transferability. None of it is luck.
Benchmark your business against the median for your sector first; that's the price of admission. The work to reach the top quartile is what Lydell measures.
As founder dependency rises, buyer multiples compress non-linearly. Below 40% dependency, multiples expand sharply; above 70%, transactions often convert to asset deals with seller financing.
Moving from 60% → 30% founder dependency historically adds 1.4 turns of EBITDA. On a $4M EBITDA business, that's $5.6M of additional enterprise value — purely operational.
Identify the 6–10 decisions only you make today. Each one transferred is measurable multiple expansion. Lydell quantifies and tracks every one.
Of businesses claiming to be 'sale-ready,' only 16% score above 75 when independently assessed. The middle 62% sit in tier C/D — sellable, but with significant valuation drag.
The bulk of the market lives in tier C (41–60). Crossing 75 is the inflection where strategics, PE platforms, and family offices actively compete for the deal.
Get your independent score before going to market. Listing at tier C and trying to negotiate to tier A pricing is the #1 cause of broken processes.
Readiness collapses transaction time. Tier-A businesses close 4–6× faster than tier-D, because the data room, contracts, financials, and SOPs are already buyer-grade.
Every additional week in diligence is a 3–7% probability of deal break (re-trades, financing shifts, buyer cold feet). Speed is value preservation.
Run Lydell's Data Room Engine before signing an LOI. Average prep time drops from 90 days to 14, and re-trade rate halves.
Tracking median EBITDA multiples across three core LMM categories. Healthcare services and B2B SaaS continue to outpace professional services as institutional capital allocates toward recurring, regulated, and tech-enabled cash flow.
The ~80bps spread between Q1 '24 and Q4 '25 for healthcare services represents roughly $400K additional enterprise value per $1M of EBITDA — without changing the business itself.
Time-to-market matters less than readiness. The businesses capturing multiple expansion are the ones already at Tier A when the cycle turns.
Independent verification of normalized EBITDA. Sell-side QoE alone adds 0.3–0.7 turns by removing buyer discount-for-uncertainty.
The working capital baseline at close. Negotiated badly, it silently transfers $200K–$2M of value to the buyer.
Deferred purchase price tied to future performance. Median earnout pays out at 47% of stated maximum. Negotiate the floor, not the ceiling.
What you legally promise is true at close. Breach exposure can survive 18–24 months. Insurance now standard above $5M EV.
D&O and E&O coverage that survives the transaction. Required by sophisticated buyers; cost: 1.5–3% of policy limit.
Top-1 / Top-5 / Top-10 revenue share. Above 20% top-1, expect aggressive earnout structures or escrow holdbacks.
One-time, non-recurring, or owner-discretionary expenses added back to EBITDA. Defensible add-backs need documentation, not assertion.
5–15% of EV held 12–24 months against indemnification claims. Negotiate cap and basket; both move materially in diligence.
Buyer's right to walk if business materially deteriorates between LOI and close. Defined tightly = seller protection.
Pre-existing contract terms that can blow up a deal in week 6. Audit every contract before going to market — not after.
200–800 line items across legal, financial, HR, IP, ops. Buyer-grade prep starts here; weak prep adds 60+ days.
Post-close support the seller provides. Negotiate scope, duration, and rate — or unpaid work consumes your first year of freedom.
The platform runs all five intelligence layers on your business in under 10 minutes and shows the exact gap between your tier and the one buyers pay for.
Get my readiness score