Priced vs. Auction: Choosing Your Go-to-Market Strategy

What if you’re worth twice what a financial valuation says? Most brokers will never find out - they don’t know how to run the kind of process that reveals strategic value. We do.

Why Your Broker’s Playbook Could Cost You

Here’s a reality most business owners don’t know: the vast majority of brokers in the lower middle market only know how to run a priced listing. They set an asking price, post your business on listing sites, and wait for interested buyers to show up.

It’s the same playbook they’ve used for decades. And for many businesses, it works fine.

But “fine” isn’t what you’re after. You didn’t build your company to settle for fine.

The problem with one-size-fits-all is that it treats a high-growth biotech company the same as a local service business. It assumes every buyer will value your business the same way. It leaves money on the table for businesses that could command competitive interest.

Legacy brokers don’t run competitive bid processes because they’ve never learned how. They don’t have the expertise to manage multiple sophisticated buyers simultaneously and extract the best price for you. They don’t know how to create the kind of urgency that drives offers.

So they default to what they know. And you might never realize what you missed.

How Competition Drives Up Your Price

Instead of naming a price and hoping someone bites, you bring multiple qualified buyers to the table at the same time. Each one knows the others are interested. Each one has to put their best offer forward or risk losing the deal.

This is what a competitive bid process looks like. When it’s the right fit, the results speak for themselves.

In one recent transaction, we ran an unpriced competitive bid for a biotech company. Instead of setting a price based on financial valuation alone, we let sophisticated buyers determine what the business was worth to them.

The result: six qualified offers. The winning bid came in 50% higher than the next closest offer. The final sale price was double the original financial valuation.

That’s not a typo. Double.

Not every business is right for this approach. But when the conditions are right, the outcomes can be transformative.

5 Signals Your Business Has Strategic Value

During our free evaluation, we look for specific signals that indicate your business might benefit from a competitive bid process rather than a standard priced listing.

You've built something that goes beyond the numbers.

Your intellectual property, proprietary systems, or dominant market position creates value that doesn’t show up on a balance sheet. A financial valuation captures your earnings - but it might miss what makes your business irreplaceable to the right acquirer.

You're growing, and you can prove it.

High-growth businesses in expanding markets often attract buyers who value trajectory more than current earnings. If your numbers tell a compelling growth story, multiple buyers may compete to own that future.

Your likely buyers are sophisticated.

Competitive bids work when buyers can perform their own analysis and determine what your business is worth to them specifically. This isn’t the right approach for individual buyers looking for a lifestyle business - but for strategic acquirers and private equity groups, it’s exactly how they prefer to compete.

Different buyers will value you differently.

Maybe you fill a gap in a competitor’s product line. Maybe your customer base is exactly what a larger company needs to expand into a new market. When strategic fit varies widely among potential acquirers, letting them compete reveals value that a single asking price would leave hidden.

Your EBITDA is $2.5M or more.

At this level, you’re playing in a different league. Private equity firms actively hunt for businesses with $2.5M+ in EBITDA - it’s their sweet spot. When PE buyers compete against strategic acquirers, you benefit from two different valuation methodologies bidding against each other. That competition almost always produces a better outcome than a priced listing.

If none of these sound like your situation, a priced listing is probably the right approach. That’s perfectly fine - it’s how most businesses sell, and it works well when executed properly.

But if you recognized your business in any of those descriptions, you might have options you didn’t know existed.

The Right Strategy for Your Situation - Not Ours

Here’s what makes Arx different: we don’t have a default playbook. We have expertise in both approaches and recommend whichever one maximizes your outcome.

During your free evaluation, we assess your business for strategic value that might not be captured in a financial valuation alone. We look at your competitive landscape. We consider who the likely buyers are and how they typically behave.

Then we give you an honest recommendation.

Sometimes that means a traditional priced listing with aggressive buyer outreach to create competition within a structured process. Sometimes that means an unpriced competitive bid that lets sophisticated buyers determine value through their offers.

We’re not trying to push you toward the approach that sounds more prestigious. We recommend what’s right for your specific situation. If a priced listing is your best path, we’ll tell you that directly.

What matters is the outcome, not the methodology.

A Premium Price or Proof of Value - Either Way, You Win

When we ran the competitive bid process for Setareh Biotech, we reached out to approximately 350 strategic buyers and competitors. Six submitted serious offers.

The winning bid beat the next closest by 50%. The final price doubled the financial valuation we’d initially calculated.

“Things went smoothly from the start of interviews to the end of closing. We could call him at any time and he always responded.” — Kathleen Malekzadeh, Setareh Biotech

That’s one way an auction wins: a standout offer that exceeds expectations.

But there’s another outcome that’s equally valuable. In a recent SaaS transaction, we received six competitive bids - and all of them landed within 10% of each other. The seller didn’t take the highest offer. They took the cleanest: the buyer with the strongest financing, the fastest timeline, and the fewest contingencies.

When multiple sophisticated buyers arrive at similar valuations, you know you’ve achieved true market pricing. There’s no second-guessing. No wondering if you left money on the table. The market has spoken, and now you get to choose the deal that’s best for you beyond just price.

Find Out If You’re Sitting on Strategic Value

The first step is understanding what you have. Our free evaluation doesn’t just tell you what your business is worth financially - it identifies whether you might be sitting on strategic value that could change your outcome entirely.

No cost. No obligation. Just an honest assessment of your options.

Keep reading: Why choose Arx · How we find buyers · Our fees · Our process

Find Out What's Possible

Every situation is different. Our free evaluation will tell you what your business is worth, whether a competitive bid makes sense, and what kind of outcome you can realistically expect. No pressure, no obligation - just clarity.

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