Owner Dependency: The Hidden Threat to Business Value
Owner Dependency: The Hidden Threat to Business Value Quick Answer Owner dependency typically costs 3x to 4x in valuation multiples compared to founder-independent firms that sell for 7x to 8x yearly profits. Buyers apply a 10% to 25% key-person discount when a founder remains central to operations, viewing the company as a single point of […]
How Customer Concentration Kills Your Business Valuation
How Customer Concentration Kills Your Business Valuation Quick Answer A single large customer typically triggers at least a 30 percent valuation discount from buyers, who assess post-acquisition cash flow stability rather than historical sales alone. Customer concentration ratios measure the percentage of revenue from your largest accounts, and high ratios signal risk during M&A due […]
Deal Structuring in M&A: 6 Structures That Align Buyer & Seller Interests
6 deal structures used in lower middle market M&A: full cash, recap with rollover, earnout, seller financing, mezzanine, and management buyout. When each fits.