How Tech CEOs Can Drive Premium Valuations in 2025

5 Steps to Break Through the Plateau

The tech M&A market in 2025 isn’t broken—but it’s not booming either. Valuations have stabilized below their 2021 peaks, and many founders feel stuck in a holding pattern. The “great plateau” is real, though not permanent.

At Falcon Capital, we’re advising lower middle market tech firms on how to break through this ceiling and create real valuation lift. In a cautious, data-driven buyer environment, founders need to take proactive steps rather than wait for the market to improve. Here’s how.

Make the Shift from Growth to Efficiency and Prove It

Buyers today don’t reward top-line growth alone. They reward smart growth.

What buyers want: Revenue retention > 100%, CAC payback under 12 months, and clear visibility into EBITDA scaling.
What CEOs should do: Ruthlessly optimize go-to-market efficiency. Show how each dollar of sales or marketing spend turns into profitable, recurring revenue. Package that into a clean, investor-grade dashboard.

Make AI a Value Driver, Not Just a Talking Point

“AI-enabled” is no longer impressive unless it moves the needle.

What buyers want: AI that automates workflows, reduces labor costs, or enhances pricing/personalization.
What CEOs should do: Operationalize AI into your product or process in a way that’s measurable. Show how AI reduces costs or increases margins—and back it with metrics.

Expand Share of Wallet, Not Just Logo Count

In a market that’s skeptical of expansion through new customer acquisition, upsell and embedded revenue is king.

What buyers want: Companies with strong customer intimacy, multi-product attach rates, and long lifetime value.
What CEOs should do: Layer in embedded payments, compliance features, or workflow tools that drive up ACV without major new spend. Show that your customers aren’t just loyal—they’re growing with you.

Professionalize the Exit Process Now, Not Later

Many deals fall short not due to fundamentals—but because the story wasn’t ready for prime time. Prepare! Time kills deals. Preparation compresses the time cycle as well and the risk profile.

What buyers want: Clean financials, clear KPIs, and a compelling narrative backed by data.
What CEOs should do: Invest in a quality of earnings review, build a business plan that demonstrates growth. Bound the plan by time – 3 years. Have solid budgets and forecast. Lean how to build out a reliable sales pipeline, and engage with a banker early. All of this takes time. Don’t wait until you’re “ready”—buyers have call centers banging out calls and emails.

Be Flexible on Deal Structure, Rigid on Strategic Fit

This market rewards collaboration. Rigid expectations on price or structure can kill great deals.

What buyers want: Creative paths to close—partial liquidity, seller notes, earnouts tied to realistic milestones.
What CEOs should do: Know your walk-away number but be open to a phased exit that aligns interests and builds value over time.

The market may be on a plateau, but you don’t have to be. Founders who shift from passive optimism to active optimization are still commanding premium valuations. This isn’t about waiting for a better market. It’s about becoming the kind of company that thrives in any market. At Falcon we always impress upon CEOs that their best exit strategy is a growth strategy.

If you’re a founder who’s ready to create real value, and break through the ceiling, let’s talk—we can get you there!