DTC Valuation Calculator
What your brand is worth, and how much of that actually reaches your bank account. Start with your P&L, price the levers buyers care about, then walk enterprise value down to cash at close.
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Turn your P&L into adjusted EBITDA
Use the last 12 months (trailing twelve months, TTM). Buyers price on adjusted EBITDA: earnings before interest, tax, depreciation and amortization, plus costs that won't continue under a new owner.
Trailing 12 months
Add-backs and adjustments
Price the 8 levers that move your multiple
Your starting multiple comes from your adjusted EBITDA size band. Each lever then adds or removes turns (one turn = 1× EBITDA). The first three read straight from your P&L.
The size bands come from published deal data (see Benchmarks). The turn values on each lever are our working assumptions, set to point the same direction as the factors M&A advisors name. They're not measured market data. Treat the output as a range to test with an advisor, not a quote.
Bridge enterprise value to cash at close
Enterprise value is the headline. What wires on closing day is smaller: debt gets paid off, working capital gets trued up, fees come out, and part of the price is held back or paid later.
Balance sheet
Deal terms
Percentages apply to enterprise value. Tax is a flat estimate on cash received at close; taxes on escrow, notes and earnouts come later, when they're paid. This is a planning model, not tax or legal advice.
Convert any flat fee or factor rate to a true APR
A "10% fee" repaid in three months is not 10% money. This converts a flat fee or factor rate into an annual percentage rate (APR) from the actual repayment schedule, then prices it against common financing options.
APR here is the nominal annual rate implied by the repayment schedule (periodic rate × periods per year), the way lenders quote it. Sales-based repayment assumes flat daily sales; a slow season stretches the term and lowers the APR, a fast one raises it.
Benchmarks and sources
Every market number in the calculator, with where it came from. Numbers in brackets point to the source list at the bottom.
Multiple bands by adjusted EBITDA
| Adjusted EBITDA | Low | Base | High | Basis | Source |
|---|---|---|---|---|---|
| Under $500k | 2.3× | 2.8× | 3.3× | SDE Small deals price on seller’s discretionary earnings, which adds back all owner pay. Range is for e-commerce brands. | [1] |
| $500k–$1M | 3.0× | 3.8× | 4.5× | EBITDA IBBA: deals under $2M averaged 2.8–3.1× SDE in Q2 2026. | [1][2] |
| $1M–$3M | 4.0× | 5.0× | 6.0× | EBITDA IBBA: $2M–$5M deals averaged 4.0×; FE International puts DTC brands around 3–5×. | [1][2][4] |
| $3M–$10M | 5.5× | 6.5× | 7.5× | EBITDA IBBA: $5M–$50M deals averaged 5.8× in Q2 2026. | [1][2] |
| $10M+ | 7.0× | 8.5× | 10.0× | EBITDA Industry dependent. PE deals at $10–25M enterprise value averaged 6.4× in 2024; consumer M&A median was 9.2× in 2025. | [1][3][5] |
Deal-structure norms
| Term | What's typical | Source |
|---|---|---|
| Cash at close | 83–92% of the price on average in Q2 2026, by deal size. In $5M–$50M deals: 83% cash, 6% seller financing, 7% earnout, 4% retained equity. | [2] |
| Escrow or holdback | In 88% of 2025 private-target deals. Median 10% of deal value without reps-and-warranties insurance, 2.8% with it. | [6] |
| Earnout | In 24% of 2025 private-target deals (SRS, mostly larger deals); about 1% of IBBA deals under $2M. | [6][2] |
| Working capital peg | Usually the trailing-12-month average of normalized net working capital, in a cash-free, debt-free deal. Shortfalls or excess move the price dollar for dollar. | [7] |
| Inventory | A normal level of inventory is usually included in the price. Excess inventory is bought separately, often at cost. | [8] |
| Advisor fees | Lehman scale: 5% of the first $1M, then 4/3/2/1%. Double Lehman: 10/8/6/4/2%. One marketplace charges 15% up to $700k, 8% from $700k to $5M, 2.5% above. | [9][10] |
| Rollover equity | Used in 63.6% of 2024 PE deals, averaging 14.5% of the price. 20–30% is typical in middle-market deals, per William Blair. | [3][11] |
| Quality premium | PE deals with above-average financials (growth and margins over 10%) averaged 7.7× EBITDA vs 7.2× overall in 2024. | [3] |
| Federal tax on the gain | Top long-term capital gains rate 20%, above $613,700 taxable income (married filing jointly, 2026). The 3.8% NIIT generally doesn’t apply to an active owner’s gain on an S-corp or partnership interest. In an asset sale, the inventory portion is ordinary income. | [20][21][22] |
Financing options, typical APR
| Option | Typical APR | Notes | Source |
|---|---|---|---|
| Bank term loan | 6.7–7.1% | Median new small-business term loan rates, Q1 2026 (Kansas City Fed district). | [14] |
| Bank line of credit | 6.8–7.3% | Median new line-of-credit rates, Q1 2026 (Kansas City Fed district). | [14] |
| SBA 7(a) loan | 10–13.5% | Maximum variable rates (prime + 3% to 6.5%, by loan size) at the 7.00% prime rate of Oct 2, 2026. | [12][13] |
| Venture debt | 12–13.4% | Proxy: Hercules Capital debt-portfolio yield, Q2 2026 (core 12.0%, GAAP 13.4%). | [18] |
| Wayflyer (fee example) | 8.4–16.5% | Our calculation from Wayflyer’s $4,200 fee on $100,000: 16.5% repaid evenly over 6 months, 8.4% if repaid in one lump at 6 months. | [17] |
| Credit card | 20.9–22.2% | Proxy: bank credit card plans, June 2026. Consumer data; there is no Fed series for business cards. | [19] |
| Shopify Capital (fee example) | 24.9–49.7% | Our calculation from Shopify’s 13% fixed-fee example, repaid evenly over 12 months (24.9%) or 6 months (49.7%). | [16] |
| Online loans and credit lines | 10–80% | Equivalent APRs the Fed found on online lender sites, repaid over 6–18 months. | [15] |
| Merchant cash advance | 80–110% | Fed: equivalent APRs "may exceed 80 percent or even rise to triple digits." Its 1.30-factor example repaid over ~6 months works out to about 109% (our calculation). | [15] |
The 8 levers, in turns
| Lever | Range of adjustment |
|---|---|
| Revenue growth | −1.00× to +1.00× |
| Gross margin | −0.50× to +0.25× |
| Paid-media dependence | −0.75× to +0.25× |
| Repeat revenue | −0.50× to +0.75× |
| Channel concentration | −0.75× to 0.00× |
| Product concentration | −0.50× to 0.00× |
| Owner dependence | −0.75× to +0.25× |
| Quality of financials | −0.75× to +0.25× |
Lever weights are Finsi Growth's assumptions, not sourced market data.
Sources
- How to value a small business in the US, Website Closers, updated Sep 7, 2026.
- Market Pulse Q2 2026 Highlights, IBBA and M&A Source, Aug 2026.
- GF Data Highlights and Products (full-year 2024), GF Data, an ACG company, Apr 2025.
- How Much Is Your Business Really Worth?, FE International, Jan 22, 2026.
- Annual Consumer M&A Report, Capstone Partners, Apr 27, 2026.
- SRS Acquiom 2026 Deal Terms Study: escrows and earnouts, DealLawyers.com, Apr 28, 2026.
- The importance of net working capital in M&A, BDO, Feb 15, 2019.
- How do you value your inventory for an e-commerce business?, Website Closers, updated May 22, 2026.
- M&A glossary: Lehman formula, Morgan & Westfield, accessed Oct 2026.
- Sell your online business: fees, Empire Flippers, accessed Oct 2026.
- Rollover Equity and Wealth Planning Considerations, William Blair, Sep 2025.
- 7(a) loan program: terms, conditions and eligibility, U.S. Small Business Administration, accessed Oct 2026.
- Bank Prime Loan Rate (DPRIME), Federal Reserve Bank of St. Louis (FRED), Oct 2, 2026.
- Small Business Lending Survey, Q1 2026, Federal Reserve Bank of Kansas City, Jun 25, 2026.
- Uncertain Terms: What Small Business Borrowers Find When Browsing Online Lender Websites, Federal Reserve Board and Federal Reserve Bank of Cleveland, Dec 2019.
- Shopify Capital in the United States, Shopify Help Center, accessed Oct 2026.
- Wayflyer revenue-based financing, Wayflyer, accessed Oct 2026.
- Hercules Capital Q2 2026 financial results (8-K), U.S. SEC EDGAR, Jul 30, 2026.
- Consumer Credit G.19: credit card interest rates, Federal Reserve Board, Sep 8, 2026.
- Revenue Procedure 2025-32 (2026 inflation adjustments), IRS, 2025.
- Questions and answers on the Net Investment Income Tax, IRS, updated Sep 14, 2026.
- Publication 544: Sales and Other Dispositions of Assets, IRS, 2025.
How the calculator works
It follows the order a buyer's model does. Adjusted EBITDA is your trailing-12-month earnings plus documented add-backs. A size band sets the starting multiple, because bigger, steadier earnings get paid more per dollar. Eight levers then move that multiple up or down in turns. Multiple × adjusted EBITDA gives enterprise value. The bridge subtracts debt, trues up working capital, takes out fees and separates the part of the price paid later. What's left is cash at close.
For the full walk-through, with a worked $12M example and what to fix 12 to 24 months before a sale, read DTC Brand Valuation: From EBITDA Multiple to Cash at Close. The metrics behind the levers are defined in LTVPedia, starting with gross margin and contribution margin.