The Private Company Valuation Index

This index analyzes 7,601 small-business transactions with a usable EV/SDE multiple, drawn from a database of 20,699 deals assembled by Tomasz Felpel, founder of Value Alpha. The data is sourced from verified marketplace and brokerage transactions, including 2,820 verified-sold deals, and analyzed using the fair-value methodology that powers Value Alpha, developed with Columbia faculty and drawing on NYU research. Deals span 2014 to 2026, with listings concentrated in early 2026 and verified-sold transactions across the full period. Coverage is 23 industry groups, 16 with a sample of 25 or more.

Two notes on reading the numbers. First, 98 percent of the EV/SDE sample is sub-$5M (Main Street and online SMB); the deal-size curve extends to roughly $85B in enterprise value using the broader universe, and those larger-deal figures are stated on an EV/EBITDA basis. Second, SDE and EBITDA multiples are not directly comparable, because EBITDA removes the owner's compensation, so EBITDA multiples read higher even when the underlying value is similar. Each figure below is labeled with its basis.

Two populations, and why the distinction matters. Two different groups appear in this index and the difference between them drives the headline finding. Active listings are businesses currently offered for sale, at their asking price, and they include businesses that will never sell. Verified-sold deals are the 2,820 transactions where a completed sale was recorded. The all-deal median of 2.67× SDE covers all 7,601 transactions with a usable multiple; the 2.58× figure is verified-sold only; the 3.26× figure is active listings only.

Why this does not contradict the widely cited 94 percent of asking price. BizBuySell's quarterly Insight Report states that small businesses sell at roughly 94 percent of asking price. That figure and the gap described here answer different questions, and both are correct. The 94 percent number is a within-deal comparison: it takes each business that sold and compares its final price to that same listing's asking price, which has often already been reduced during the marketing period. It can only include businesses that sold. The gap described here is a between-population comparison: the median multiple across active listings against the median multiple across verified-sold deals. Businesses that listed and never sold remain in the first group.

The difference between the two is selection. A seller priced well above the clearing multiple does not usually sell at 94 percent of that price. More often they do not sell at all, and so they never enter the 94 percent sample in the first place. Read together, the two figures say something useful: the 94 percent number describes how the deals that closed ended up, and it does not describe the odds that price is the reason a business never closes.

Definitions and limits. SDE is seller's discretionary earnings, operating profit before the owner's compensation and discretionary expenses. Deals span 2014 to 2026, but the two populations are not matched on time: active listings are concentrated in early 2026 while verified-sold transactions span the full period, so part of the observed gap may reflect the period rather than seller behavior. Coverage is 23 industry groups, and the 7 groups with fewer than 25 observations should be read as indicative only.

What is deliberately not here. Customer concentration, owner dependence, and add-back survival all move a real valuation, but the source records do not capture them per deal, so they are left out rather than estimated. The recurring-revenue figure is a proxy (subscription-heavy vs transactional sectors), and the strategic-buyer figure is a thin cut (n=185, EV/EBITDA). Both are labeled above. An honest index reports what the data supports and no more.

Sector	Median EV/SDE	p25–p75	n
Healthcare services	3.35×	2.89–4.35	139
Retail / hospitality	3.37×	2.70–4.20	479
Manufacturing / industrial	3.36×	2.82–3.85	66
Professional / B2B services	3.09×	2.60–3.65	452
Software / SaaS (micro / online)	2.86×	2.20–3.80	523
E-commerce / consumer	2.42×	1.83–3.17	4,584

These six sectors cover 6,243 of the 7,601 usable-multiple deals. The remaining 1,358 sit in sectors with too few transactions to publish a median anyone should rely on, so they are left out of this table but still counted in the headline figures above.

Related reading

• The AI-Native Valuation Benchmark: where comps break for AI companies.
• What acquirers really pay for when they buy your company.
• How I price a company in 48 hours.
• The Private-Company Pricing Checklist.

EV/SDE medians. Software here is micro and online SaaS, which prices below several hands-on sectors at Main Street scale.

1. Scale beats sector. The climb from the smallest deals to $50M-plus (2.6× to 12.3× EBITDA, and +124% just from sub-$5M to the $5M to $50M band) moves price more than any industry choice does. If you want a higher multiple, the lever is growing the business, not picking a sexier category.

2. The SaaS premium mostly disappears at Main Street scale. Micro-SaaS clears at 2.86× SDE, barely above the 2.67× all-deal median and below hands-on trades like construction (3.47×) and healthcare (3.35×). Buyers pay for transferable cash flow, not the label.

3. Asking prices run ahead of clearing prices. Verified-sold deals sit about 7% under the 2.86× rule of thumb, and active listings ask around 3.26×, well above where comparable deals actually close. The gap between the listing and the close is real money, and it is where a sober second opinion pays for itself.

FAQ

Questions, answered

What multiple do small businesses actually sell for?

Across 7,601 small-business transactions analyzed for this index, the median company sold for 2.67 times seller's discretionary earnings (SDE), with most deals between 2.0x and 3.4x. That is about 7 percent below the common 2.86x rule of thumb. Verified-sold deals clear lower still, around 2.58x, while active listings ask about 3.26x, so asking prices run well above where deals actually close.

Does business size or industry matter more for valuation?

Size, decisively. On an EV/EBITDA basis the multiple more than quadruples with scale, from under 3x on sub-$5M deals to about 6.4x at $5M to $50M and 12.3x above $50M, a roughly 124 percent jump just from sub-$5M to the $5-50M band. Sector matters far less: the spread across industries is a fraction of the spread across size bands. The practical takeaway is that scaling the business moves price more than choosing a higher-multiple industry.

Is the SaaS premium real for small businesses?

Mostly not at Main Street scale. Micro and online SaaS in this dataset cleared at a median 2.86x SDE, barely above the 2.67x all-deal median and below hands-on businesses like healthcare services (3.35x) and retail (3.37x). The large recurring-revenue premium often cited for mid-market software (40 to 60 percent) compresses sharply for small, owner-operated companies, where buyers pay for transferable cash flow rather than the software label.

Does this contradict the 94 percent of asking price figure?

No. They measure different things. The 94 percent figure compares each business that sold to its own asking price, which has often already been reduced, and it can only include businesses that sold. This index compares the median multiple across all active listings, including the ones that never sell, to the median multiple across verified-sold deals. The difference between the two is selection: a seller priced well above the clearing multiple usually does not sell at 94 percent of that price, they do not sell at all, so they never enter the 94 percent sample. The 94 percent figure describes how closed deals ended up; it does not describe the odds that price is why a business never closes.

Can I cite this index?

Yes, with attribution to Tomasz Felpel and a link to tomaszfelpel.com/valuation-index. For the underlying sector breakdowns, a specific cut, or commentary on deadline, contact info@tomaszfelpel.com.

More: AI-Native Valuation Benchmark · Valuing a pre-revenue startup · What acquirers pay for · valuation calculator · pricing checklist · Valuation 101