How each buyer prices your company
Three buyers, three playbooks
A strategic acquirer buys to fill a gap in its product, customer base or geography. It can pay for synergies, but it moves slowly and usually ties part of the price to the founder staying. A private equity fund buys a platform or an add-on, funds the deal partly with debt and wants management to stay and reinvest. An individual or search-fund buyer wants a stable, cash-generating business to run personally.
| Buyer | Typical cash at close | Deferred element | Typical timeline |
|---|---|---|---|
| Strategic acquirer | 70% to 85% | Earnout 10% to 25% | 4 to 7 months |
| Private equity | 65% to 75% | Rollover 20% to 30% | 3 to 5 months |
| Individual or search fund | 70% to 80% | Seller note 10% to 20% | 3 to 6 months |
What moves the multiple
Size comes first: more EBITDA brings in buyers with cheaper capital. After that, buyers pay for growth, recurring revenue and a business that does not run through its founder, and they discount for customer concentration. Test the trade-off between growth and profit with the Rule of 40 simulator (opens in a new tab).
Headline price versus cash at close
The biggest offer is not always the best one. A strategic bid with a 25% earnout can put less cash in your account on day one than a lower private equity bid with a rollover. Decode any offer line by line with the LOI value decoder, and model an earnout’s real value with the earnout modelling tool.
Why competition matters more than the model
Models give a range; competition decides where in that range you land. A process that runs strategics, funds and individual buyers in parallel creates a deadline, a comparison and a reason for each bidder to improve its terms. A single inbound offer has none of those. If you are holding one now, read the unsolicited offer guide (opens in a new tab) before replying.
Frequently asked questions
- Who pays more, a strategic buyer or private equity?
- Strategic acquirers often pay the highest headline price because they can count cost and revenue synergies. Private equity usually pays a little less but closes faster, offers rollover equity and keeps the business independent. The best outcome comes from having both in the same process.
- What is rollover equity?
- Rollover equity is the part of the price a seller reinvests in the buyer’s new holding company, typically 10% to 30% in private equity deals. It lets the seller share in a second exit, usually three to five years later.
- How big are earnouts in tech acquisitions?
- Earnouts typically make up 10% to 30% of the price, paid over one to three years against revenue or EBITDA targets. They grow when the business depends heavily on the founder or on a few large customers.
- What is a seller note?
- A seller note is part of the price the seller lends to the buyer, repaid with interest over several years. It is common in deals with individual and search-fund buyers, where bank or SBA-style debt covers most of the price.
- How long does it take to sell a company?
- Most lower mid-market sales take three to seven months from first buyer contact to completion. Private equity and individual buyers tend to move faster; strategic acquirers take longer because of internal approvals and integration planning.
- How accurate is the simulator?
- It applies typical 2026 lower mid-market multiples and deal structures to your inputs. Real offers depend on buyer appetite, competition in the process and diligence findings, so treat the results as a starting range.