Stride Live Webinar Recap with Greg Northrop, CPA, MAcc
Thinking about selling your MSP? You’re not alone—but understanding your company’s value is more than just multiplying EBITDA. In this recent Stride Live webinar, we talked with Greg Northrop, Managing Partner at iTvaluations and IT Tax Advisors, about how MSP valuations really work, what makes your business more attractive to buyers, and why operational maturity plays a bigger role than many realize.
If you’re planning a sale—whether in the next year or the next five—here’s what to keep in mind.
The Market Has More Buyers Than Sellers Right Now
According to Greg, MSPs are in demand. Right now, there are more buyers in the market than there are sellers.
“From a pure supply-and-demand standpoint, that can drive prices up,” he said. “But only to a point.”
That “point” is determined by the strength of your business—not just your revenue. Buyers are looking for clean operations, strong margins, and predictable recurring revenue. A business that checks those boxes can often command a higher multiple.
EBITDA Is Just the Starting Point
Greg cautioned against relying too heavily on EBITDA as your valuation benchmark.
“You can’t just slap a 5x multiple on your EBITDA and call that your valuation,” he explained.
While EBITDA gives buyers a rough starting point, it’s not the whole story. Other factors matter—often more than the number itself:
- The quality of your financial statements
- Your gross and net margins
- The percentage of recurring revenue
- Your vertical expertise or specialization
- The presence of a leadership team beyond the owner
- Sales maturity and client acquisition capabilities
- Billing practices and contract structures
Together, these elements paint a picture of how sustainable—and scalable—your business actually is.
What Buyers Are Really Looking For
Buyers aren’t just acquiring contracts—they’re acquiring risk. So the more you’ve de-risked your business, the more attractive it becomes.
Greg shared a few traits that consistently stand out:
- Strong recurring revenue from managed services
- Documented SOPs and workflows across operations
- A reliable sales process, including a track record of winning new logos
- A second layer of leadership, especially if the owner wants to step away
- Industry specialization, which can boost value through strategic alignment
“If you’re highly operationally mature, you’re not just a good company—you’re the prettiest company on the market,” Greg said. “And that’s when you can command a higher multiple—sometimes a full turn higher.”
Clean Financials Still Matter—A Lot
While valuation is about more than just numbers, your financials need to be accurate, consistent, and well-documented. Gap-based reporting, strong margins, and a clean balance sheet make it easier for buyers to understand what they’re stepping into—and reduce the risk of issues during due diligence.
“We still see MSPs come to market with messy books or missing documentation,” Greg said. “That creates delays, concerns, and in some cases, lower offers.”
If you’re thinking about selling, get your systems in order now—so you’re not scrambling when opportunity knocks.
It’s Not Just About Exit—It’s About Options
One of the themes throughout the conversation was that valuation isn’t just about selling your business. It’s about creating options.
“Even if you’re not planning to exit in the next 12 months, building value gives you leverage,” Greg explained. “You can choose to sell, scale, partner, or step back—because the business isn’t dependent on you.”
That flexibility is something many owners want—but don’t build toward early enough. The good news? You don’t have to do it alone.
Final Thoughts
If you’re thinking about your exit timeline or just want a clearer view of what your MSP is worth, remember this: valuation isn’t a formula—it’s a reflection of how your business is built.
The more operationally mature you are, the more attractive you are to buyers. And the earlier you start working toward that goal, the more choices you’ll have down the road.
🎥 Want to watch the full conversation with Greg Northrop?
Watch the full webinar replay here on LinkedIn
This Stride Live Webinar is hosted by Stride Services. Stride is a comprehensive financial solutions provider, specializing in outsourced bookkeeping, accounting, tax, and advisory services for Managed Service Providers.
If you’re interested in being a featured guest on our Live Webinars or if there’s a subject matter expert you’d like us to interview, please let us know!
Show Notes + Transcript:
Casey Seaborn: Email
Casey Seaborn: LinkedIn
About iTV & IT Tax Advisors
iTvaluations is a business transformation and valuation firm helping IT service companies plan for growth, transactions, and value creation. IT Tax Advisors provides specialized tax services tailored to the needs of MSPs, VARs, and technology firms.
To learn more, visit www.itvaluations.com.
About Stride Services
Stride Services is a comprehensive financial partner for MSPs, providing outsourced bookkeeping, tax, and advisory services designed to improve clarity, support confident decision-making, and eliminate financial fire drills. Whether you need monthly accounting support or proactive tax guidance, Stride helps you stay on track and plan for what’s next.
To learn more, visit www.stride.services.
