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A Modern View of What the Middle Market is

Updated: Jul 8, 2019

Many define middle market, in terms of revenues, as $5 million to about a billion dollars, or in terms of EBITDA as $1 million or more.

We see it differently. There are many companies that don’t really fit the model of the traditional small business yet have negligible revenues or have a deliberate burn-rate and so are running losses, but as part of a detailed strategy to grow their business over the next 3 to 6 years.

We explicitly include these businesses in the middle market given that even though they are “small” currently they face the challenges and opportunities many middle market companies face. They are much more middle market than they are “small” or “negative EBITDA”.

For example the traditional and antiquated view of middle market excludes funded start-ups that have capital and the need for experienced professional help to execute their strategy and grow their business. Yet companies with this and similar profiles are much more likely to need to manage at “middle market” scale such as operations in multiple states or countries, international aspects to their business, tax complexity, need for a stronger ERP etc. than “small business” only.

Another example that in our modern model and view fits the middle market profile are founder run businesses that are pre private equity yet expanding rapidly. This could be a restauarant group with the strategy to reach a certain level of store openings in order to have a proper private equity fund or family office conversation or an importer quickly winning market share in consumer electronics.

So though the simple traditional model of middle market still serves in many cases it deliberately leaves out some of the most dynamic businesses that in our view must be included in the modern view of the middle market.


Andrew Barker MBA CPA

Middle Market Advisory LLC

(469) 403-4944

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