Buyers pay for agency revenue that renews without the founder: retainers with long tenure, a diversified client roster, account leadership that owns relationships, stable gross margin and documented delivery. They discount founder-sourced revenue, client concentration, project-only work and contractor-dependent delivery. Deals typically combine cash at close with an earnout on retained revenue and a transition role.
What buyers pay for
Retainer revenue as a share of the total, client tenure, no client above ten percent, a leadership layer that owns accounts, gross margin consistency, productized service lines and inbound growth.
What buyers discount
The founder as rainmaker and creative lead, two or three clients carrying half the revenue, project revenue that restarts every quarter, contractor-heavy delivery, and unclear IP on tools and work product.
Who the buyers are
Holding companies and sponsor-backed platforms, larger independent agencies, consultancies and technology firms buying a capability, and operators or search funds for smaller shops. Each values a different thing.
The earnout is the deal
Agency earnouts run one to three years on retained revenue or gross profit. Negotiate the metric the founder can influence, the accounting definitions, protections against the buyer's own decisions reducing the number, and acceleration if the buyer sells again.
The preparation that moves the multiple
Move relationships onto a team, productize service lines, tighten reporting and attribution, and shift growth from founder selling to inbound and referral. This is operating work, and it is the difference between a shop and a company.
We run a marketing division inside Black Key Holdings. When we prepare an agency for sale, our own team can do this work inside the business rather than recommend it from outside.
