Most consulting firm founders carry a number in their head. It's usually a hopeful one, arrived at over lunch from a quick conversation with another founder who sold, or even just a rough sense that "two times revenue sounds about right."
Buyers don't think that way. That gap, between what a founder expects and how a buyer arrives at a number, is where deals fall apart and money gets left on the table.
Allen Debes, CEO of Koniag Capital, has spent his career building, buying, and selling consulting firms from both sides of the table. Mark Orttung scaled Nexient before selling in 2021 and now leads Projectworks. Between them both, they have bought and sold more than 10 consulting firms. In this podcast, they help founders answer the big question: “What is my firm worth?”, breaking down exactly how professional services firms get valued, what makes a firm easier or harder to sell, and how knowing your exit options now changes the way you build your firm for the future.
The M&A market in 2026: serious capital, higher bar
There is no shortage of buyers or capital. Private equity, strategics, and family offices are all actively looking for quality assets. Koniag Capital alone has half a billion dollars to deploy. The appetite is real and competitive.
But in 2026, the bar is much higher than before. The era of easy money that defined M&A in 2021 is over, though some founders are still optimistically quoting valuations from that time. Customer concentration, founder dependence, and G&A as a percentage of revenue all got a pass in 2021, but can come under scrutiny today.
The headline multiples from that era are technically coming back, but only for firms that tick every box. For everyone else, expectations need to reset.
(If you want a clear picture of what buyers are looking for at each stage of the sale, our Consulting Mergers and Acquisition Cheat Sheet maps it out.)
Why founders and buyers arrive at completely different numbers
Founders think in revenue multiples: 1x, 2x, 3x. It's the shorthand that travels fastest in founder conversations, easy to exchange over lunch.
Buyers think in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), and more specifically, adjusted EBITDA. A significant part of the LOI (Letter of Intent) and diligence process is a negotiation over what gets added back to that number: founder distributions, one-off expenses, back-office costs that will be absorbed post-acquisition.
Revenue multiples come into play in one specific scenario: when a firm has deliberately reinvested profits into genuine, demonstrable differentiation that matters to the buyer. Outside of that, it is EBITDA.
Realistic benchmarks for consulting firm valuations:
- Commoditized businesses (undifferentiated managed services, value-add resellers): 5 to 6x EBITDA
- Healthy, well-run consulting firms: 8 to 12x EBITDA
- Exceptional, fully de-risked firms with strong differentiation: up to 15x EBITDA
That upper end is still achievable, but it won’t happen by accident. It requires ringing every bell below, built deliberately over years.
Buyers work through a checklist of risk factors, including:
- Founder and key-person dependence
- Client concentration
- Client longevity and expansion velocity
- New logo growth
- AI adoption and operational efficiency
- Differentiation
Understanding how buyers scrutinize these variables helps you in understanding your valuation multiple. Getting them right makes your firm stronger to run, regardless of whether a sale is on the table. If you’re only just starting to think about your exit when you’re ready to sell, you’re already too late.
Start preparing your exit early
The minimum runway for meaningful exit preparation is two years. Three is more realistic. Getting G&A down as a percentage of revenue, sharpening differentiation, building a leadership team that operates independently… None of these are quick fixes. Buyers want to see sustained performance, and not a spike engineered ahead of a sale process.
Our advice to firms who are currently mid-transformation (implementing AI, restructuring delivery, improving margins) is to just be patient and wait. Do not go to market on projected efficiencies. Get two solid quarters of real results first. A buyer asked to speculate on future improvement will discount it or structure it into an earn-out.
Mark Orttung sold Nexient in 2021. The first M&A conversation he entertained was in 2016. Five years of fielding inbound interest, learning what buyers were actually looking for, and building towards it. When the decision to sell came, it came from a position of strength.
The leverage principle
The most important factor in any exit negotiation is leverage. The best way to have leverage is to have something better to do with your firm than sell it.
"When somebody comes at you and says we're interested in buying, if you can say 'maybe, but we have this plan, we're really excited about where this is going,' you get a lot more leverage than if you've designed yourself into a position where you need to sell."
- Mark Orttung, CEO, Projectworks
Founders who build with exit as the primary goal tend to undermine their own position. When a business is optimized for a transaction rather than delivery and growth, client and employee attrition follow. That is the opposite of what any buyer wants to see in diligence.
Build a great business and keep your options open. The right offer, at the right time, from the right buyer, becomes available from that position. Including the ability to be selective about cultural fit with whoever you sell to. Founders who get over-focused on the close-day number and under-focused on what comes after often spend two to three years miserable inside a structure that does not suit them or their team.
"The intentionality of serving clients and building a great team has to be the centerpiece. If you're not doing that, and you're focused only on getting to some multiple, employee attrition and customer attrition go up."
- Allen Debes, CEO, Koniag Capital
Still not sure what your firm is actually worth?
If you are not sure what your firm would be worth today, or what is holding your multiple back, our consulting firm valuation calculator gives you an indicative view of your revenue multiple, the factors lifting or limiting it, and where to focus before buyers start asking hard questions.
Download our M&A Cheat Sheet for a structured guide to the full M&A process, from first conversation through to close.
For any firm founders or leaders who are serious about planning their exit and want to speak to someone who has been on both sides of this process, Allen and his team at Koniag Capital work with consulting firm founders at exactly this stage. Get in touch with them here!
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