A founder deciding to sell usually meets the buyers one cold email at a time. This is the whole map in one place: who each buyer is, what their money makes them do, what they typically pay, and how long they take. We're one of the six, and we've put ourselves in the table on the same terms as everyone else.
Filter by what your company looks like and the list reorders, with the buyers most likely to want it at the top.
Buys to hold and operate indefinitely, funded by cash on the balance sheet rather than a fund with a return date. Makes its money from running the company well over many years, so there is no resale to prepare for.
Buys capability, customers or a team it would otherwise build. Pays the most when the fit is real, because the value is on their side of the table rather than yours. Often folds the product into theirs afterwards.
Buys to improve and resell inside a fund life, usually three to five years, often with debt. Real money, real conditions: leverage, board control and a plan that has to work by a date.
Introduces you to a queue of buyers for a fee. Fast to a first conversation and slow to a wire, because the buyer at the other end still has to find money. Your company becomes a public listing.
Runs a process on your behalf and takes a percentage, typically 8% to 12% at this size. Their incentive is a closed deal, which is mostly aligned with yours and not entirely, since a closed deal at any price beats no deal.
Your own people buy the company, usually with seller financing because they don't have the cash. Best cultural outcome available and the slowest route to money in your account.
The table above compares them. This is what sits behind each row, because the label matters far less than where the money comes from and what it obliges the buyer to do with your company afterwards.
A competitor, or a larger company that wants what you have built without spending two years building it. They are the only buyer who can pay more than the company earns, because part of the value shows up on their side of the table: a customer list they can sell into, an integration they can stop paying for, a team they cannot hire.
The same logic explains the risk. What they bought was the capability, so the product is often folded into theirs and the brand retired. If your first question is whether the thing keeps existing under its own name, ask early and get the answer in writing.
A fund with limited partners and a return date, usually three to five years out, frequently using debt to buy. The money is real and so are the conditions: board control, a plan that has to work by a specific quarter, and an exit that has to happen whether or not it is the right year for it.
Below roughly $5M in revenue most funds cannot make the arithmetic work, which is why the small end of this market gets served by the smaller operators covered further down.
Capital with no fund life and no obligation to sell, funded from a balance sheet rather than a vehicle that has to be wound up. The return comes from operating the company well over a long period, so there is no resale to prepare for and no pressure to make a quarter look a particular way for a future buyer.
That is the category we are in. It is also the one founders have heard least about, so we have written it up properly: what permanent capital means.
A site where your company becomes a listing and a queue of buyers can look at it. Fast to a first conversation and slow to a wire, because whoever replies still has to find the money. Fees are lower than a broker and the work is mostly yours.
It is the most common route under about $2M in revenue and the most exposed one: your numbers, and often your identity, sit in front of a lot of people who will never buy anything.
Sell-side representation, typically 8% to 12% at this size, sometimes with a retainer. A good one widens the field and handles the parts of a deal you have never done before. Their incentive is a closed deal, which lines up with yours most of the way and not the whole way, because a closed deal at any price beats no deal.
Whether it is worth the fee depends mostly on how many credible buyers you could reach yourself: work out whether you need one.
Your own people buy the company, almost always with seller financing, because they have the operating knowledge and not the cash. Culturally it is the softest landing available and financially it is the slowest, since you are paid out of the profits of a company you no longer control.
It works best where the team is already running the business day to day and the price is modest enough to be serviced out of cash flow.
They overlap, they are not synonyms, and the difference decides who is allowed to sell your company after they have bought it.
Describes the funding, not the company. Capital that is not sitting in a fund with a wind-up date, so nobody is contractually required to sell what it buys. A holding company can be funded this way. A fund almost never is.
A company that owns other companies. It says nothing on its own about how long anything is held, since plenty of holding companies are funded by ordinary funds and sell on the usual schedule. Ask what is underneath it before you read anything into the name.
Private equity mechanics applied to companies under roughly $5M in revenue: a fund, a hold period, an exit. Often a good outcome and a fast one. The thing to establish is the fund's age, because a buyer four years into a seven-year fund is shopping for a resale, not a home.
Most founders start by asking who might buy them. The better first question is what they want out of it, because that eliminates four of the six columns before you send a single email.
Highest price, fastest close, best home for the team, or staying involved. You can optimize for one of those properly and two of them partly. Naming it first saves a quarter.
Two buyers from the column that fits and one from a different column as a control. A single conversation is not a market, and five is a process that leaks.
Proof of funds, their last three closes and how long each took, and a founder from a past deal you can call without the buyer arranging it. Ask us the same, and we'll answer.
In practice: strategic acquirers, lower middle market private equity, permanent capital holding companies, marketplace buyers, and occasionally your own management team. Below about $2M in revenue, marketplaces and individual buyers do most of the volume. Between $2M and $10M, holdcos and lower middle market funds do.
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