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The economics · For lower middle market buyers

Proprietary deals close 14–21% below auctioned ones.

On a $5M EBITDA business, that's $5M–$7.5M off the purchase price. Same company. Same seller. Different way of finding them.

14–21%
Below auction price
1–2×
Turns lower on EBITDA
0
Other bidders
$5–7.5M
Saved on $5M EBITDA deal
The problem with the brokered path

What buying through bankers actually costs you.

You're bidding against everyone.

By the time a deal hits your inbox, three to five other funds have the same CIM and the same hunger. You can win at the price that beat them all, or you can pass and watch someone else overpay.

The banker's calendar runs your diligence.

Four weeks to underwrite a business it took the owner twenty years to build. LOI by Friday. Final bids by month-end. The deals that fit you best are often the ones where you ran out of time to prove it.

Your edge gets priced in before you bid.

Operating expertise, a clean capital structure, a faster close, whatever makes you a better buyer than the next fund, the seller's already expecting it. You're paying for the right to deliver it.

Why proprietary changes the math

Three reasons off-market deals close cheaper.

1

No auction premium.

One buyer at the table instead of five. The multiple lands closer to what the business is worth, typically a 1–2× turn lower on EBITDA.

2

Terms you can actually negotiate.

Bigger seller notes. Earnouts that share risk. Diligence on your timeline. The headline price is only part of what you save.

3

No banker on the other side.

You talk to the owner, not the advisor working for them. The pricing tension that auctions are designed to create simply isn't there.

The math

$5M EBITDA business. Two paths.

Brokered auction

The standard path.

EBITDA$5,000,000
Multiple7.0×
Other bidders3–5
Negotiating leverageTheirs
TimelineBanker's clock
Purchase price $35,000,000
Proprietary

The off-market path.

EBITDA$5,000,000
Multiple5.5–6.0×
Other bidders0
Negotiating leverageYours
TimelineYours
Purchase price $27.5M–$30.0M
Savings on entry price
$5M–$7.5M

14–21% lower purchase price on the same business, before counting better terms on seller notes, escrow, and working-capital adjustments.

Honest caveats

  • We don't guarantee a deal. Owner timing, diligence outcomes, and price alignment sit outside any sourcing firm's control.
  • The approach works for focused buy boxes. Vague mandates produce vague results.
  • There's real upfront work, kickoff, buy box approval, and screening before outreach begins.
  • The consulting fee at close applies on deals sourced through the engagement, with a 36-month declining tail.
Next step

Run the math for your buy box.

We'll size your buy box, model the savings on your specific criteria, and walk through the fee structure on a 20-minute call. Complimentary. You leave with the analysis.

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