Research Methodology

Data Sources

WETYR's research draws from six data layers: (1) WETYR's own active pipeline across 72 niches — sell-side mandates, buy-side underwrites, direct operator-buyer transactions; (2) GF Data quarterly reports for lower-middle-market private-company transaction data; (3) PitchBook private-company transaction database for cross-validation; (4) IBBA Market Pulse for sub-$50M business-broker-tier transactions; (5) BVR DealStats for valuation comparables; (6) public 10-K filings of major aggregators in each niche (Apex Service Partners, Wrench Group, Mars Vet, VCA, Heartland Dental, etc.).

Multiple Calculation

Multiples are reported as cash-equivalent at close. The calculation: gross stated consideration minus probability-weighted earnouts (typically discounted 30-50% based on metric difficulty), minus rollover equity carried at a liquidity discount (typically 30%), minus the present-value gap on seller notes (calculated at market rate against the note's stated rate). The resulting number divided by trailing-twelve-month EBITDA (or SDE for sub-$2M cash-flow businesses) produces the cash-equivalent multiple.

Normalization Adjustments

Reported EBITDA and SDE figures are normalized for: owner-discretionary expenses (above-market owner salary, family on payroll, personal vehicles, etc.), one-time events (legal settlements, asset sales, non-recurring revenue), accounting policy differences (cash vs accrual, expensed-vs-capitalized boundaries), and working-capital normalization (the trailing-12-month average sets the peg, with unusually high or low periods identified and adjusted). This produces adjusted EBITDA / SDE comparable across reporting periods and across companies.

Industry Multiple Bands

Each industry's multiple band is reported as a range (sub-$2M EBITDA, $2M-$10M mid-market, $10M+ platform) reflecting actual observed transaction prices in each tier. Position within the band is determined by eight value drivers: recurring revenue percentage, customer concentration, owner dependency, growth trajectory, team retention probability, financial hygiene, market position, and operational systems maturity. The Exit Score tool maps individual businesses to these drivers.

Cross-Validation

Every quarterly multiple is cross-validated against at least three independent data sources before publication. When sources disagree by more than 20%, we either flag the divergence in the report or hold publication pending further validation. We do not report a multiple based on a single source.

Sample Size Disclosures

For each niche, the underlying sample size of transactions informing the published multiple is available on request under NDA. Niches with thin transaction data (below 8 comparables in a quarter) are reported with explicit confidence-interval flags. We do not extrapolate from inadequate samples.

Update Cadence

Quarterly multiples reports update every quarter (March, June, September, December). The annual Operating Insights Report updates each January with prior-year synthesis. Niche thesis pages are reviewed quarterly and updated whenever multiples shift meaningfully. The Authoritative Sources block on every page lists the primary references for ongoing verification.

Limitations

Three limitations apply to every WETYR research output: (1) private-transaction data is incomplete — meaningful percentages of transactions are never publicly reported; (2) multiples lag actual market shifts by 1-2 quarters as data flows in; (3) micro-cap transactions (under $500K SDE) have the thinnest data and the widest reported ranges. Readers making transaction decisions should engage WETYR or a specialist directly for situation-specific analysis rather than rely on published averages.

Authoritative Sources & Further Reading

WETYR works alongside primary sources, regulators, and industry data providers when advising owners and operators. The references below are the same sources our advisory team uses when modeling deals, benchmarking multiples, and stress-testing assumptions. We encourage every owner, buyer, and operator to verify any data point that materially affects their decision against the underlying primary source.

For deeper transaction-specific data, the GF Data and PitchBook private-company transaction databases publish quarterly multiple ranges by industry size band that we cross-reference against our own pipeline benchmarks. Owners considering a sale should also review the Pepperdine Private Capital Markets Report (free, annual) for current cost-of-capital and lender appetite data across the lower middle market. Buyers underwriting search-fund or holdco theses commonly pair Stanford GSB's Search Fund Study with the IBBA Market Pulse report, which tracks multiples for sub-$50M transactions quarterly. None of these sources replace deal-specific advisory, but they give owners and operators the same reference points professional acquirers are using on the other side of the table.

Related WETYR Resources

Every WETYR resource ladders into a structured engagement framework. Whether you are diagnosing readiness, modeling a number, or preparing for a specific transaction phase, the resources below cover the most common owner and operator workflows. All tools are free; all guides are operator-written; all engagements start with a confidential conversation.

If you are not sure where to start, the Exit Readiness Score takes about four minutes and produces a one-page diagnostic on the value drivers most likely to compress your multiple. From there the natural next step is either a long-form guide covering your specific situation, a focused glossary term lookup, or a confidential introductory call with our team to discuss whether WETYR's advisory or operator-buyer engagement is a fit. Our team responds to every inbound inquiry within one business day.