How to sell a software development company
Custom software and dev shops are valued on recurring-vs-project revenue mix and how transferable the engineering team is.
The value drivers
A base of retained/managed-service clients, not one-off projects
A documented delivery methodology and mid-level leads who can run projects
Reusable IP, frameworks or products beyond pure billable hours
What drags the price down
The risks a buyer discounts
- Project-based, lumpy revenue with no recurring base
- Value concentrated in a few senior engineers or the founder
Typical valuation
typically 3–6× EBITDA, higher with recurring managed-service revenue.
Usual buyerlarger agencies, systems integrators and PE-backed services platforms
Indicative only — your defensible range is built from your actual numbers.
How to prepare a software development company for sale
Know your number
Get a defensible valuation grounded in your normalised earnings and how buyers actually price businesses like yours.
Close the value gaps
Fix what discounts the price — the risks above — and strengthen the drivers buyers pay a premium for.
Clean the books & data room
Normalise financials and assemble a buyer-ready data room so nothing derails the deal in due diligence.
Run a managed process
Approach several qualified buyers to create competitive tension and protect both price and your leverage.
FAQ
How much is a software development company worth?
Usually 3–6× EBITDA, moved up by recurring managed-service revenue and a transferable engineering team, and down by lumpy project work.
How do I prepare a dev shop for sale?
Shift revenue toward retainers and managed services, build delivery leadership below the founder, and document your methodology and IP.
Selling a software development company?
We help owners value, prepare and sell — quietly, and for the best achievable price.