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Episode Summary
Someone calls. They say they represent a buyer looking for a company like yours, throw out a six-to-ten times multiple that gets your stomach moving, and ask you to send over a few years of financials. You haven’t told your spouse you’re thinking about selling. Three months and a thousand paper cuts later, the offer is 50% lower than the number that pulled you into the room. I had Mark Jordan, who’s been running middle-market investment banking deals for decades, walk me through the process I wish someone had handed me before I sold my own company. We got into what an investment banker actually does (different from a broker, different from a Main Street agent), the three market segments and where your business actually sits, why the Value Gap hides until you see your Normalized EBITDA line through a buyer’s lens, how fees really work (a retainer plus a tiered performance fee), the four marketing quadrants a real process drives a deal into, and why negotiating with one buyer at the table is the most expensive mistake you’ll make. Mark’s punchline: start three years out, and stop taking that call alone.
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## Top 10 Takeaways- Investment banking covers a dozen things. The piece that matters to a seller is M&A advisory.
- Middle market starts at roughly $2M of Normalized EBITDA. Below that, you’re shopping in a different aisle.
- Value isn’t a multiple of earnings. It’s 20+ drivers, and most of them measure transferability.
- Internal drivers (second-line management, SOPs) you can fix. External drivers (barriers to entry) you can’t.
- Start three years out if you want a full exit. Twelve months out if you’re doing a private equity recap.
- Main Street performance fees run around 10%. Middle Market is a retainer plus a tiered 5%, then 2 to 3% backend.
- You don’t hire a banker for a higher price. You hire them to manage a process you’ve never run.
- Negotiating with one buyer at the table means you have no idea what the market would actually pay.
- A real process pushes your deal into four marketing quadrants, not just the obvious low-hanging competitors.
- Death by a thousand paper cuts is real. By month five, you’ll accept 50% less just to be done.
Sound Bites
“The big thing they’re hiring them for is managing a process. Because the process starts from the very first time your phone rings.” (@00:29:46) — Mark Jordan
“What I like to refer to is the death of a thousand paper cuts over the next three, four, five months. The business owner gets worn down with information requests. And then the buyer says, oh you know what, we’ve discovered this thing here or that thing there, now we can’t pay you that value. It’s going to be 50% less than they were expecting.” (@00:27:55) — Mark Jordan
“As owners you think they have the prize, which is the check. The reality is you have the prize, which is the cash flow. Owners need to realize they have the thing that everybody wants.” (@00:29:19) — Ryan Tansom
“The very first mistake they make is even engaging in the phone call. Their answer really should be: let me connect you with my advisor.” (@00:45:00) — Mark Jordan
“Get prepared in advance. Even if you’re not thinking about selling your company for years, take some time now and understand what your business looks like to a third party, to someone that’s not internal.” (@00:57:02) — Mark Jordan
About This Episode
Mark Jordan is the founder of Vercor, a middle-market M&A advisory firm with offices across the U.S. Before founding Vercor, he spent years on the internal side of business succession planning (estate, tax, family transitions) and watched a structural gap in the middle market: large firms served the Wall Street deals, small firms served Main Street, and almost nobody brought a unified marketing-driven process to companies between $10M and $200M of transaction value. Vercor was built to fill that gap. Mark is also the author of a book on selling your business, referenced throughout the conversation.
Resources Mentioned
- Vercor — Mark’s middle-market M&A advisory firm. — vercor.com
- Mark Jordan’s book on selling your business — Referenced for the chapter on why negotiating with one buyer is one of the biggest mistakes sellers make.
- Ryan Moran — Referenced for the framing that the owner holds the prize (cash flow), not the buyer (the check).
- Mark Jordan direct contact — mark@vercor.com, 770-851-9952
Connections
Phase + Module:
- Module 9 — Operator Transition — The transitional commitment that follows most middle-market closings, and why a clean operator transition increases what a buyer is willing to pay
- Module 4 — Sustainable Financials — Clean books, organized records, and the kind of due diligence preparation that doesn’t trigger buyer’s remorse
Milestones:
- Milestone 5 — Market Value — Mark’s “market value assessment” is exactly this: a realistic range the marketplace would pay today
- Milestone 6 — Transaction Value — Headline price minus fees, escrow, holdback, and transitional terms
- Milestone 7 — Value Growth Plan — The years between today’s number and the target number, which is where the value driver work actually pays off
- Milestone 25 — Operator Transition Plan — The one-to-two year transition most middle-market sellers don’t realize they’re signing up for
Concepts referenced:
- Value Gap — The space between the multiple in the article and the offer at the closing table
- The Owner-Operator Trap™ — Why a company without second-line management commands a discount and a longer transition
- Enterprise Value vs. Equity Value — Headline price versus what actually wires at closing after escrow and holdback
- The Four Value Levers — The internal levers (margins, growth, team, systems) the value driver scorecard maps onto