On day one of almost every sale, the buyer’s number and the seller’s number are far apart. That gap isn’t a sign the deal is doomed. It shows up in four predictable ways, and knowing which one you’re facing tells you how to close it.
Anchor to the median
First, some market context. SRS Acquiom’s data on 2025 private-tech deals puts the median return at 3.3x equity invested, up from 2.5x in 2024. The market has clearly recovered some ground.
The average return, though, was 6.5x, because a handful of huge outliers pull it up. The median tells you what happened to a typical deal: a median 6.7 years to exit on a median $26 million of equity invested.
When you negotiate your own deal, the comp that should anchor your expectations is the median, not the unicorn at the end of the chart. Buyers know exactly where the median lives. You should too.
Four ways the numbers diverge
Different reference points: Sellers anchor to the last preferred round’s post-money valuation, which was set in a different market and reflects preferred economics, not common. They remember peak-cycle comps from the headlines and what a friend’s company sold for. Buyers anchor to current trading comps, recent precedent deals in the same vertical and their own internal IRR or accretion thresholds.
At this stage neither side has a quality-of-earnings report, so there’s no shared factual baseline. Sellers cherry-pick the highest comparables and apply the multiple to forward ARR. Buyers use a broader comp set, often apply it to trailing ARR and adjust down for size, slowing growth or profitability gaps; same methodology label, very different outputs.
Banker-driven expectations: If you’re running a process, your banker likely floated a valuation range to win the mandate, and that range usually sits at the optimistic end of what’s defensible. Sellers then treat the top of the range as the floor. Buyers read the CIM, discount the projections and come in well below it, which feels like lowballing but is normal market behavior.
Strategic premium speculation: Sellers assume a strategic buyer will pay up for synergies, so a strategic process should clear at a meaningful premium. In practice, buyers, strategics included, rarely put synergy value into the headline price at the LOI stage. They’re more likely to use it as their justification for walking away.
Pricing the story, not the asset: Before the LOI, founders are often pricing years of work, the mission and what the company should be worth. The buyer is pricing a financial asset. This rarely gets said out loud, but it’s often what drives sellers to reject offers that are objectively at market.
Narrowing the gap
Most of these gaps narrow once both sides argue from the same facts. Know the median for your stage and sector, understand how a buyer will build its number, and be honest about which of the four gaps you’re in.
A number you can defend with data survives diligence. A number built on a headline usually doesn’t.
Ahmed Hasan is the founder and CEO of Venture Bridge Law, a corporate and M&A boutique. This article is general information, not legal advice.