While private equity firms have been an active part of the M&A market for years, they are now one of the major players in small business acquisitions. In our experience, private equity firms will consider businesses with EBITDA of at least $500K and higher for an addon opportunity. Most platform companies should be $2M EBITDA or greater.
To make your small business appealing to private equity, build a proven management team who can run the business in your absence. Or, plan to sell years before you actually want to exit the business. You’ll stay on to help run the business and drive growth while the private equity firm assists with extra resources and high-level administrative and strategic support.
