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 developed with Columbia and NYU faculty that powers Value Alpha. 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.

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

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.

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 [email protected].

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