What Private Equity and Strategic Buyers Look for in an Agency.

If you're an agency owner thinking about growth, investment, or a future sale, understanding what buyers want is essential. Whether it's a private equity firm looking for a high-performing platform or a strategic buyer seeking synergy, knowing what drives interest (and valuation) can give you a powerful edge.

Over the years, I've worked with founders on both sides of the table. As someone who built and sold agencies like Digitas and MRM, and now advises owners preparing for sale, I've seen firsthand what attracts serious buyers.

Here are the top factors that make an agency stand out to investors and strategic acquirers alike:

1. Strong and Predictable Financial Performance

Buyers want to invest in stability and upside. That means:

• Consistent revenue growth over time

• Healthy EBITDA margins (15-25%)

• A mix of recurring and project-based revenue with high client retention

Pro Tip: Monthly recurring revenue (MRR), retainer contracts, and diversified client portfolios are key signals of financial health.

2. Scalable, Systemized Operations

An agency that runs like a well-oiled machine is more valuable than one that relies heavily on the founder. Buyers want to know:

• Who runs day-to-day operations?

• Are there documented processes for delivery, sales, and hiring?

• Can the business scale without adding headcount at the same pace as revenue?

Pro Tip: Productized services, process automation, and strong middle management increase buyer confidence.

3. Differentiated Market Position

Strategic buyers, in particular, are looking for synergy—which means specialization matters.

• Do you have a clear niche, vertical focus, or proprietary methodology?

• Is your brand known for something buyers can't easily replicate?

Pro Tip: Agencies that dominate a niche or have defensible IP command higher multiples.

4. Strong Team and Culture

Human capital is a huge part of what buyers are acquiring. A talented, stable team that's excited about the future can make or break a deal.

• Is your leadership team capable of driving growth post-sale?

• Do you have clear succession planning in place?

• How's your employee retention?

Pro Tip: A documented org structure and leadership development plan shows you're serious about continuity.

5. Strategic Fit

Especially in strategic acquisitions, alignment matters. Buyers are asking:

• Does this agency fill a gap in our offering or open a new market?

• Are there cross-sell or up-sell opportunities?

• Can we integrate this agency smoothly into our operations?

Pro Tip: The more your agency complements a buyer's goals, the easier it is to close a deal—and the more leverage you have on valuation.

6. Clean Books and Due Diligence Readiness

Many deals fall apart during due diligence. Be prepared with:

• Audited or clean financial statements

• Clear client contracts and retention data

• No outstanding legal or compliance issues

Pro Tip: Invest in a pre-sale financial and legal review to avoid red flags later.

Final Thoughts

If you're building toward an eventual exit, don't wait until you're ready to sell to think about what buyers want. Start now.

By focusing on these key value drivers, you'll not only make your agency more attractive to investors—you'll build a stronger, more resilient business in the process.