Search funds
One operator who wants to run the business. Often uses SBA or bank debt and a seller note.
Lower market · $1M to $10M
Selling a $5 million business.
A founder exit, run with institutional discipline.
At this size the buyer pool is wide: search funds, independent sponsors, holding companies, roll-up platforms and strategic buyers looking for a tuck-in. The work is to put a clean, defensible set of numbers in front of enough of them, quickly, so price is set by competition rather than by the first offer.
- How buyers price at this size
- SDE / EBITDA
- How buyers price at this size
- Typical launch to close
- 60-120 days
- Typical launch to close
- Qualified buyers approached
- 20-60
- Qualified buyers approached
Lower market exit desk
Confidential
- Add-backs graded and SDE agreedWeek 1
- Teaser and buyer list approvedWeek 2
- NDAs signed, data room openWeek 3
- Indicative offers comparedWeek 6
- LOI and short exclusivityWeek 8
- Confirmatory diligence and closeWeek 12
You approve every buyer before your name is shared.
Why this size is different
The buyer is often buying you. Plan the handover.
Below $10 million, much of the value sits with the founder: the relationships, the know-how and the habits that keep the numbers steady. Buyers price that risk through earnouts, seller notes and long transitions. The best outcomes come from showing that the business runs without you before a buyer asks.
- Document the processes that live in your head.
- Move key customer and supplier relationships to a second person.
- Separate personal costs from the business so the add-backs hold up.
- Know your monthly numbers for the last 24 months.
Valuation at this size
How buyers price a $1M to $10M business
Typical ranges for profitable digital businesses. Growth, retention, concentration and founder dependence move each one up or down.
| Business type | Usually priced on | Typical range |
|---|---|---|
| Bootstrapped B2B SaaS | SDE or EBITDA, sometimes ARR | 4x to 8x profit, or 2x to 5x ARR |
| Content and media sites | SDE, trailing 12 months | 3x to 5x |
| E-commerce and DTC brands | SDE or EBITDA | 2.5x to 5x |
| Agencies and services | EBITDA, adjusted for concentration | 3x to 6x |
| Marketplaces | EBITDA or net revenue | 4x to 8x profit |
Ranges are typical of recent lower-market transactions and are not a valuation of your business. Grade your add-backs in the EBITDA normaliser.
The process
Six stages, about three months.
A short, well-prepared process keeps buyers competing and protects your leverage.
Grade your add-backs- 01
Numbers
Week 1
We rebuild SDE and EBITDA from your accounts and grade every add-back by how well it is evidenced.
OutputAgreed earnings base
- 02
Positioning
Week 2
A short teaser and a buyer list across search funds, holdcos, roll-ups and strategics.
OutputTeaser and buyer list
- 03
Outreach
Weeks 2-5
Named buyers are approached in parallel. Your name is shared only after an NDA you approve.
OutputSigned NDAs
- 04
Offers
Weeks 5-7
Indicative offers are laid side by side on effective value, not headline price.
OutputOffer comparison
- 05
LOI
Week 8
The preferred LOI is marked up for cash at close, earnout terms and a short exclusivity window.
OutputSigned LOI
- 06
Close
Weeks 9-12
Confirmatory diligence, purchase agreement with your lawyer, and a planned handover.
OutputCompletion
Who buys at this size
Four buyer types, four playbooks.
Holding companies
Buy and hold for cash flow. Simple structures, fast decisions, lower multiples.
Roll-up platforms
Buy to combine. Pay more for clean fit, but lean on earnouts and integration terms.
Strategic tuck-ins
A larger company buying a product or customer base. Can pay the most when the fit is real.
Protect the price
Where lower-market value leaks
Weak add-backs
Every undocumented add-back is a negotiation you will lose in diligence. Evidence them before launch.
Seller notes
Common at this size. Keep them short, secured and subordinated only where you must.
Long transitions
Six months is common. Two years tied to an earnout is not, unless the price reflects it.
Working capital
Agree how the peg is calculated before signing the LOI, not after. Use the NWC peg calculator.
Other deal sizes
Every size runs differently.
- $10M to $50MInstitutional process, QofE, CIM and several PE and strategic bidders.
- $50M to $150MComplex capital structures, sponsor auctions and cross-border buyers.
- $150M and aboveTransformative, listed-acquirer and multi-jurisdiction transactions.
- Buyer archetypesWho buys at each size, and how each one behaves at the table.
Questions
What founders and boards ask us.
How much is a $1 million profit SaaS business worth?
Profitable bootstrapped SaaS businesses at this size commonly trade at around 4x to 8x SDE or EBITDA, so roughly $4 million to $8 million, depending on growth, churn, customer concentration and how much the business depends on the founder.
How long does it take to sell a $5 million business?
A well-prepared process usually takes three to five months from launch to completion. Preparation of the numbers beforehand is what keeps it short.
Do I need a QofE at this size?
Not always. Many lower-market buyers run their own financial diligence. A light sell-side review of your add-backs and revenue recognition is usually enough and protects the price.
Will I have to stay after the sale?
Usually for a transition of three to twelve months. Longer periods are normal only when part of the price depends on an earnout.
Should I sell to a search fund or a strategic buyer?
It depends on what matters most. Strategic buyers can pay more when the fit is real; search funds and holdcos often offer a simpler, faster close. A competitive process lets you compare both.
Exits from $1M to $10M
Tell us about the business.
A few details are enough to start. A senior member of the team reads every enquiry and will be in touch to discuss it in detail. Nothing is shared with any buyer without your written approval.
- Strict NDA before any numbers are shared.
- No buyer contact without your sign-off.
- No obligation to sell.