Mid-market PE
Buys a platform, keeps management, wants rollover equity and a growth plan. Screens hard on Rule of 40.
Read the playbookCore mid-market · $10M to $50M
Selling a $20 million SaaS company.
Eight-figure exits need institutional mechanics.
At this size, the buyers are private equity funds, PE-backed platforms and strategic acquirers with corporate development teams. They expect a Quality of Earnings report, a Confidential Information Memorandum, a structured data room and a timetable. Getting those right is what turns interest into several competing offers.
- Expected by institutional buyers
- QofE + CIM
- Expected by institutional buyers
- Typical preparation to close
- 4-7 months
- Typical preparation to close
- Competing bids we aim for
- 3-8
- Competing bids we aim for
Mid-market process desk
Confidential
- Sell-side QofE scopedMonth 1
- CIM and financial modelMonth 2
- PE and strategic outreachMonth 2
- Round 1 indicative bidsMonth 3
- Management meetings, round 2Month 4
- LOI, confirmatory diligence, SPAMonths 5-6
Buyer outreach starts only once you approve the list.
Why this size is different
Buyers price the process, not just the company.
A $20 million business run through a loose process attracts one or two bidders and a re-trade in diligence. The same business with audited-quality numbers, a clear equity story and a firm timetable attracts several, and the price is set by the second-best bid. Process quality is a value driver at this size.
- Institutional buyers screen on Rule of 40, net revenue retention and gross margin.
- Most will want the founder and leadership team to roll over some equity.
- Diligence is run by accountants, lawyers and technical reviewers, often in parallel.
- Findings the buyer can predict become price reductions after exclusivity.
Institutional mechanics
What an eight-figure process needs.
Each item exists because a buyer will ask for it. Having it ready before launch protects your leverage.
Quality of Earnings
An independent review of revenue and EBITDA.
Sell-side QofE
Commissioned before launch so the buyer’s own QofE confirms rather than discovers.
Revenue recognition
Multi-year prepaid contracts, deferred revenue and ARR definitions tie back to the ledger.
Adjusted EBITDA bridge
Every adjustment is evidenced and graded. Test yours in the QofE readiness assessment.
Confidential Information Memorandum
The equity story, in 40 to 70 pages.
Investment thesis
Why this business, why now, and what a buyer can do with it.
Cohorts and unit economics
Retention by cohort, CAC payback, gross margin by product.
Financial model
Three years of history and a defensible three-year plan.
Competitive process
Several bidders, one timetable.
Two-round structure
Indicative bids, then management meetings and final bids, so price moves before exclusivity.
Data room
Staged access: summary data in round one, full detail only to the final two or three.
LOI markup
Cash at close, rollover terms, earnout metric, indemnity cap and a short exclusivity window.
Valuation at this size
What moves a mid-market multiple
Typical ranges for software and digital businesses with $2M to $10M of EBITDA or $5M to $25M of ARR.
| Profile | Usually priced on | Typical range |
|---|---|---|
| Profitable B2B SaaS, Rule of 40+ | ARR or EBITDA | 4x to 8x ARR, 12x to 20x EBITDA |
| B2B SaaS below Rule of 40 | EBITDA | 8x to 12x EBITDA |
| Fintech and payments | EBITDA or net revenue | 8x to 14x EBITDA |
| Vertical software, high retention | ARR | 5x to 9x ARR |
| Digital media and marketplaces | EBITDA | 6x to 10x EBITDA |
Ranges are typical of recent private-market transactions, not a valuation of your business. Check your position in the Rule of 40 calculator.
Who buys at this size
The bidders you are likely to meet.
PE-backed platforms
Add-on acquisitions for an existing portfolio company. Often pay more for strategic fit and synergies.
Read the playbookStrategic acquirers
Product, customer base or team. Can move fast with cash, or slowly with stock and integration terms.
Read the playbookProtect the price
Where mid-market value leaks
Re-trades after exclusivity
Usually caused by a QofE finding. A sell-side QofE removes the surprise.
Rollover terms
Rolling 20% to 40% is common. The class of shares, the valuation and the drag rights matter as much as the percentage. See the rollover equity guide.
Earnouts on EBITDA
The buyer controls the costs after close. Push for revenue or gross profit metrics.
Key-person risk
Buyers price the risk of your engineers leaving. A retention pool funded by the buyer protects your proceeds.
Other deal sizes
Every size runs differently.
- $1M to $10MFounder-led exits, bootstrapped SaaS, content and e-commerce.
- $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 do I sell a $20 million SaaS company?
Prepare the numbers first with a sell-side Quality of Earnings, write a CIM that tells the equity story, then run a two-round process with several private equity and strategic buyers on one timetable. Sign an LOI only once the price has been tested by competition.
Do I need a Quality of Earnings report?
At this size, almost always. Institutional buyers will commission their own. A sell-side QofE lets you find and fix issues on your terms, and usually reduces re-trades after exclusivity.
What is a CIM?
A Confidential Information Memorandum is the main selling document in a mid-market process. It covers the business, market, customers, team, financials and growth plan, and is shared only after an NDA.
How many buyers should see the business?
Usually 30 to 80 are approached, 15 to 30 sign NDAs and three to eight submit indicative bids. The aim is enough real competition to set the price.
Will a PE buyer want me to stay?
Usually yes, and to roll over part of your equity so you share in the next exit. Some PE buyers plan a management change; ask about it early.
Exits from $10M to $50M
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.