When Is "Too Early" to Sell Actually Just Right?
Founders often hesitate to explore a sale because it feels too early. The business is growing. Opportunities remain. Selling now means forgoing value that could be captured later. The instinct is to wait for a better moment, a higher multiple, a cleaner exit.
This hesitation assumes that optimal timing exists and can be identified in advance. It assumes that waiting produces better outcomes than acting on current opportunities. Both assumptions are questionable. The history of M&A is filled with founders who waited too long, watched market windows close, and ultimately exited at terms they would have rejected years earlier.
Understanding when "too early" is actually "just right" requires abandoning the search for perfect timing and focusing instead on the signals that suggest the current moment may be as good as any future moment is likely to be.
The Perfect Timing Myth
The search for perfect timing assumes founders can predict when market conditions will be most favourable and align their sale process accordingly. This assumption is nearly always wrong.
Market multiples fluctuate based on factors outside any individual founder's control: interest rates, public market sentiment, sector rotation, macroeconomic conditions, and buyer-specific circumstances. A founder who waits for higher multiples may find themselves exiting during a downturn, when the very conditions they anticipated never materialised.
Strategic buyer windows open and close unpredictably. A corporate acquirer's interest depends on their internal strategy, budget cycles, leadership priorities, and competitive dynamics. Today's eager buyer may be tomorrow's distracted non-participant. The acquisition that made strategic sense last quarter may no longer fit next year's plan.
Company trajectory does not reliably improve. Many founders assume their business will be worth more in two years than today. Sometimes that is true. But competitive landscapes shift, key employees depart, customer concentration increases, and growth rates normalise. The business that looks attractive today may face headwinds that reduce its attractiveness to buyers later.
The cost of waiting is not zero. Time spent preparing for a future sale that may or may not materialise is time not spent on other priorities. Founder attention divided between running the business and watching for market signals produces suboptimal outcomes on both fronts. The opportunity cost of waiting accumulates even when the waiting strategy proves correct.
Market Reality: Multiples Down 60%, Still Attractive
Founders who benchmarked their expectations against 2021 valuations may view current multiples as disappointing. This perception requires context.
According to SaaS Capital analysis, while the median multiple is down roughly 60 per cent from its peak achieved in 2021, it has stabilised in the 6 to 7x range for public SaaS companies. Public SaaS valuations are expected to remain in their current band of 5.5x to 8x current run-rate ARR for the foreseeable future.
The decline from peak sounds dramatic, but the context matters. The 2021 peak represented an anomaly driven by pandemic-era conditions, low interest rates, and speculative exuberance. Current multiples of 5.5x to 8x ARR are historically healthy. They exceed pre-pandemic levels. They represent meaningful enterprise value for founders with growing recurring revenue.
Forvis Mazars data shows that year-to-date 2025 EBITDA multiples averaged 7.2x TEV/EBITDA across the mid-market, with transactions in the $100 million to $250 million range commanding approximately 10.0x, up from 8.5x in 2024.
Waiting for a return to 2021 multiples is likely to prove futile. Those conditions reflected a unique moment that is unlikely to recur. Founders who accept current market reality and position their businesses for strong outcomes in this environment will outperform those who wait for conditions that may never materialise.
External Signals That Suggest Timing
Certain market conditions create windows that favour sellers. Recognising these signals helps founders identify favourable timing without requiring perfect prediction.
Unsolicited inbound interest signals that buyers see value. When strategic acquirers or private equity firms reach out proactively, it indicates that someone in the market is actively looking for assets like yours. This interest validates that a market exists and provides a catalyst for broader process.
Sector consolidation waves create urgency. When competitors are being acquired, strategic buyers often accelerate their own acquisition efforts to avoid being left behind. These consolidation periods create competitive dynamics that favour sellers. They also represent windows that close once the consolidation completes and buyer appetite diminishes.
Strategic buyer activity in adjacent spaces suggests opportunity. When acquirers are building platforms through multiple transactions, they often have capacity and appetite for additional deals. Founders whose businesses could fit these platforms benefit from timing their processes to coincide with active buying programmes.
Financing market conditions affect buyer capacity. When debt markets are functioning well and private equity firms have capital to deploy, more buyers can participate in processes and compete for assets. Periods of financing market stress reduce the buyer universe and weaken competitive dynamics.
These signals suggest when market conditions favour sellers. They do not guarantee outcomes, but they indicate moments when process dynamics are more likely to produce strong results.
Internal Signals That Suggest Timing
Beyond market conditions, internal factors often provide clearer guidance about timing than external signals.
Founder fatigue is real and consequential. Building a company requires sustained energy and commitment. When that energy diminishes, decision-making suffers, growth initiatives stall, and the business loses momentum. Selling while energy remains produces better outcomes than waiting until exhaustion forces a suboptimal exit.
Growth versus burn trajectory matters. A business growing efficiently generates different outcomes than one burning cash to maintain growth. If the path from current performance to the valuation that would justify waiting requires capital that dilutes returns, the calculation changes. Sometimes selling today at a lower headline number produces better founder outcomes than growing into a higher number while accepting dilution.
Customer concentration creates timing pressure. A business dependent on a small number of large customers faces risk that those relationships could deteriorate. Selling while relationships are strong captures value that may not persist. Waiting until concentration resolves itself may mean waiting indefinitely while concentration risk materialises.
Key employee stability affects execution capacity. A strong team today may not be a strong team in two years. If critical employees have other options or are approaching points where they may move on, timing a sale while the team is intact captures value that might otherwise dissipate.
Product market fit windows have limited duration. A product that is well-positioned today may face competitive pressure that erodes differentiation over time. Selling while product positioning is strong captures premium value that may not be available once competitors catch up.
PE Hold Periods Show the Cost of Waiting
Even after deciding to sell, timing to actual liquidity can extend significantly. Understanding this reality affects how founders should think about when to start processes.
According to data tracked by S&P and Preqin, the median holding period for a private equity-backed company reached an all-time high of seven years in 2023. The average holding period for private equity firms was 6.1 years in 2024.
These statistics have implications for founders considering PE buyers. A founder who sells to a PE firm in 2025 with equity rollover may not see liquidity on that rolled equity until 2031 or 2032. The second bite of the apple comes with a very long time horizon.
Extended hold periods compound the cost of waiting. A founder who waits two years to start a process, then sells to a PE buyer with a seven-year hold period, is looking at nine years until complete liquidity. The time value of money, personal circumstances, and life priorities all argue against unnecessary delay.
BCG research found that approximately 40 per cent of transactions took longer to close than the timeline estimated in the deal announcement. Among delayed deals, nearly two-thirds required an additional three months or more beyond the original timeline. Even the sale process itself often takes longer than expected.
Founders who wait for perfect conditions before starting a process add that waiting time to an already extended timeline. Starting sooner, even if market timing feels imperfect, often produces earlier liquidity than waiting for conditions that may never arrive.
Making the Decision
The question of timing rarely has a definitive answer. But a framework for thinking about the decision helps founders move past paralysis.
Consider what would need to be true for waiting to produce better outcomes. If waiting assumes market multiples will increase, evaluate how realistic that assumption is. If waiting assumes the business will be more valuable in two years, assess what would need to happen and how confident you are in that trajectory.
Consider what could go wrong while waiting. Market conditions could deteriorate. Key employees could leave. Customer relationships could weaken. Competitive dynamics could shift. The favourable conditions you observe today are not guaranteed to persist.
Consider personal priorities and timeline. Your circumstances, life goals, and priorities matter. A sale that produces good outcomes aligned with your personal timeline may be superior to holding out for potentially better outcomes that arrive at less convenient moments.
Consider that preparation takes time. Exit readiness typically requires 12 to 24 months of preparation before going to market effectively. Founders who want optionality in the next year or two should begin preparing now, even if they have not made a definitive decision to sell.
The founders who achieve the best outcomes are often those who act on current opportunities rather than waiting for theoretical future improvements. They recognise that "too early" is frequently a rationalisation for inaction rather than a genuine assessment of timing. They understand that perfect timing is a myth and that good timing is usually good enough.
If you are debating whether the time is right to explore an exit, we would welcome a confidential conversation about how to evaluate your specific situation and what a process might look like.