The Brief · Dispatch Nº1: Why Main Street Doesn't Trade Like SaaS

Welcome to the first issue of The Brief · Dispatch - a short, biweekly note pairing one real market-data point with a plain update on what we've shipped. The data point this issue: a profitable Main-Street service business trades at less than half the EBITDA multiple of a software company, and the sector you anchor to explains most of the gap between what an owner expects and what a buyer pays.

The multiple gap is real - and bigger than most owners think

Here's the same metric - enterprise value to EBITDA, profitable-company cohort - across six sectors that small-business owners, search-fund buyers, and M&A advisors actually work in every day:

Source: Damodaran (NYU Stern), January 2025 vintage. Cohort = companies with positive EBITDA; n = firms in the sample.

Top to bottom, that's nearly a 5× spread in the multiple - from environmental services at 5.1× to subscription SaaS at 24.5×. A home-services business (think HVAC, plumbing, electrical - the bread and butter of self-funded search) sits at 11.2×, roughly 45% of the SaaS multiple.

These are public-company benchmarks, so a private small business won't trade at the headline figure - it gets discounted for size, owner-dependence, and customer concentration. But the relative ranking holds, and that's the point: the single biggest anchoring mistake we see is an owner - or an inexperienced buyer - applying a software multiple to a services business. A trades business doing $1.5M of EBITDA priced at a SaaS-like 24× isn't worth $36M; the defensible comp set says the conversation starts closer to 11×, then comes down from there for private-company risk. Anchor to the wrong row of that table and you've built a valuation gap before you've looked at a single financial statement.

The lesson for sellers and buyers alike: know your sector's real multiple range before you set an expectation. The headline number from a venture round or a public software comp is not your comp.

What we shipped

A few user-facing improvements from the last couple of weeks:

• See any valuation in your own currency. Polish-market users (and anyone valuing across borders) can now switch a saved valuation's display between PLN, EUR, and USD with a single toggle. The conversion is display-only - your saved report, the PDF, and any share link stay anchored to the original currency, so nothing gets quietly rewritten underneath you.
• No more silent saves. Editing comps, deals, or scenarios used to fail quietly in rare cases - you'd think a change saved when it hadn't. Now you get a clear, sticky warning telling you exactly what to do (re-toggle or refresh), so an edit never disappears without telling you.
• Biotech "Today vs At Peak" now moves the range. For pre-revenue biotech valuations, the toggle that switches between today's risk-adjusted value and peak-pipeline value now correctly updates the value-range bar and the bear/base/bull markers together, instead of leaving the bar parked in place.

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Want to see where your own business lands against the right comp set - the right row of that table, not the headline one? Run a valuation on ValueAlpha and see your range through the same risk-adjusted, multiple-driven lens a serious buyer uses.

For more on why the multiple matters, see understanding EBITDA multiples, why your valuation is a range, and the valuation gap.