THE STORY BEHIND THE NUMBERS
As the billing rate compresses, margin expands — and valuation compounds exponentially.
BILLING RATE — COMPRESSES WITH SCALE
Rate compresses 0.15% from $500M to $5B — a deliberate tradeoff for larger, stickier client relationships.
FIRM VALUATION — COMPOUNDS EXPONENTIALLY
Valuation grows 20–30x from $500M to $5B AUM — driven by margin expansion and the premium multiple a scaled, branded RIA commands.
→
The counterintuitive truth: charging clients slightly less as you scale makes the firm worth dramatically more. Operating leverage, brand premium, and multiple expansion compound together — turning a 10x increase in AUM into a 20–30x increase in firm value.
BILLING RATE COMPRESSION
0.90% → 0.75%
The billing rate compresses as you scale — but margin expands from 25% to 45%. Operating leverage means the firm becomes dramatically more profitable per dollar of AUM even as rates drop.
VALUATION COMPOUNDING
30x
At $5B AUM a strategic acquirer paying a 30x premium values the firm at $506M. The premium multiple is earned through brand, systems, and repeatable growth infrastructure — not just AUM size.
EBITDA LEVERAGE
15x
EBITDA grows from $1.125M at $500M AUM to $16.875M at $5B — a 15x increase on 10x the AUM. Margin expansion and scale create non-linear returns on every dollar of growth.
VALUATION SCENARIO ANALYSIS
What is the firm worth
at each multiple?
Five AUM milestones. Five multiple scenarios. The same EBITDA looks very different depending on what a buyer is willing to pay — and what you have built to justify it.
10x
BASELINE
Average firm. No differentiation. Founder-dependent.
15x
ESTABLISHED
Strong retention, clean ops, documented processes.
20x
INSTITUTIONAL
Brand, niche, growth engine, tech infrastructure.
25x
PREMIUM
Scarce niche, organic growth 15%+, PE competitive bid.
30x
STRATEGIC
Irreplaceable brand. Strategic acquirer. Competitive process.
VALUATION BY AUM MILESTONE × EBITDA MULTIPLE
| AUM |
EBITDA |
10x |
15x |
20x |
25x |
30x |
|
$500M
TODAY — 0.90% · 25% MARGIN
|
$1.125M |
$11.3M |
$16.9M |
$22.5M |
$28.1M |
$33.8M |
|
$1B
3-YEAR TARGET — 0.85% · 30% MARGIN
|
$2.55M |
$25.5M |
$38.3M |
$51M |
$63.75M |
$76.5M |
|
$1.5B
GROWTH PHASE — 0.80% · 35% MARGIN
|
$4.2M |
$42M |
$63M |
$84M |
$105M |
$126M |
|
$2B
SCALE PHASE — 0.75% · 40% MARGIN
|
$6M |
$60M |
$90M |
$120M |
$150M |
$180M |
|
$5B
MERIDIAN — 0.75% · 45% MARGIN
|
$16.875M |
$168.75M |
$253M |
$337.5M
|
$421.9M
|
$506.25M
STRATEGIC EXIT
|
WHAT JUSTIFIES EACH MULTIPLE
20x — What gets you there
✓ Documented growth engine — seminar + digital funnel
✓ Technology infrastructure — lead scoring, dashboard, CRM
✓ Diamond team model — no key-person dependency
✓ Client retention above 95% with documented service model
✓ Defined client tiers with clear upgrade paths
30x — What gets you there
✓ Everything at 20x — plus a recognizable brand
✓ Defensible niche — EntrePlaybook can't be replicated quickly
✓ Organic growth rate of 15%+ year over year
✓ Competitive sale process with multiple strategic bidders
✓ Acquirer cannot replicate what you built — pays for shortcut
THE PRESIDIO SCENARIO
CONSERVATIVE — 20x
$337.5M
At $5B AUM with documented systems and clean operations.
BASE CASE — 25x
$421.9M
With brand, niche, and 15%+ organic growth rate established.
STRATEGIC EXIT — 30x
$506.25M
Competitive process. EntrePlaybook at scale. Acquirer paying for irreplaceability.
The work being done in 2026 is not just building a better firm. It is building a more valuable asset. Every system documented, every content piece published, every client tier defined, and every diamond team added compounds directly into the multiple a buyer is willing to pay — not just the EBITDA they are multiplying.