What PE investors actually grade your consulting firm on (you get one chance)

If you're running a consulting firm somewhere between $5M and $50M of revenue and an exit, recap, or partial sale is anywhere on the horizon, the next 12 months matter more than you think.

The bifurcation between firms that command a premium and firms that get compressed is happening right now, in 2026, and it's being driven less by what your firm does and more by what your firm can prove.

I sat down at ConCon26 with Stuart Coleman, Co-Founder of Superstep Capital, and Jonathan Wilson, CEO of Dubb Value Creation, for a brutally honest hour on what investors are actually grading.

Stu's PE firm partners with $10-30M revenue digital services and consulting founders, while Jonathan has run sell-side and buy-side deals for technology and consulting firms in the $5–50M range for years.

Here's five key points I took from their conversation:

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1. You get one chance to present your numbers - treat it that way

The single biggest unforced error Stu sees pre-deal is data that has to be restated.

Every correction, every late adjustment, every "sorry, I'll get back to you with the right figure" is a credibility tax that compounds across the process.

"You get one chance to present that information. If you go back and have a change for whatever reason, it kind of diminishes credibility."

• Get an advisor in before you start the process, not after first contact

• Reconcile your top-line, gross margin and EBITDA story across CRM, PSA and finance in one operating layer

• If your numbers move materially during diligence, expect the multiple to move with them

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2. Buyers price your future, not your past

Jonathan's reframe is the single best line I've heard on positioning for sale.

Founders default to telling the story of how they got here. Buyers want to know how the firm makes money without them in it.

"What someone is really purchasing - they're purchasing your future vision while they're validating it with your past performance."

• Build a defensible three-year forecast, not just a current-year budget

• Show how the firm operates, sells and delivers without the founder in every key meeting

• Be specific about which AI, market, and capability trends actively pull in your direction

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3. The margin numbers PE is actually using

Most founders we speak to think their margin profile is fine... but most PE firms looking at them disagree.

Stu gave us the actual yardsticks, and the warning that skinny OpEx isn't a strength... it's a sign you haven't invested in the firm.

"Anything below 40% gross margin is subject to questioning. 40 to 45 is good, 45 to 50 is very good, 50 to 55 is excellent, over 55 is world class."

• Know your gross margin by project, by client, and by service line (not just at the firm level)

• If your EBITDA margin is high but gross margin is low, expect tough conversations about reinvestment

• Build the SG&A line that lets the firm scale before you go to market

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4. Trust erodes faster than valuation moves

Both Stu and Jonathan came back to the same word: trust.

Trust erosion is the single most underpriced risk in a deal process. Every late doc, revised forecast, and premature comms leak compounds.

"The buyer starts to get a little weary of you. The people on the other side are going to look at it and say - can I really trust that the leadership's gonna give me those numbers I need quickly and accurately?"

• Run a clean data-room rehearsal months before you go to market

• Lock down a comms plan with your advisor before anyone outside the leadership team finds out

• If you find a problem mid-process, surface it early with a credible plan - don't bury it

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5. The bifurcation of AI valuation is happening now

The two of them were unusually direct about this.

The next one to three years will split the consulting market into firms that earn multiple expansion through AI and firms that quietly lose ground.

"You're going to see a pretty big bifurcation. Firms that have really leaned into AI - maybe having multiple expansion - versus the ones that don't, you're going to see multiple compression. It's a pretty pivotal point in time."

• Identify which of Stu's three buckets - back office, delivery, client-facing - you're investing in. Most firms should start in delivery.

• Build the AI narrative for diligence now, with actual operational evidence, not deck slides

• If you're a sub-$30M firm, your AI story is now a material driver of valuation, not a footnote

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Final thoughts

Stu and Jonathan kept circling the same point from two different chairs: by the time a founder gets to a process, the deal is already 70% done. The remaining 30% is execution and credibility... both of which depend on the operating discipline of the previous 12 months.

If there's a single takeaway from this session, it's that the firms commanding premium valuations in 2026 will be the ones who treated 2025 like the dress rehearsal it was.