Lower middle market

What is the lower middle market?

The lower middle market is the segment of smaller private companies below the core middle market, often defined as $5M to $50M in annual revenue. Definitions vary by firm: some use revenue, others EBITDA bands, deal size or headcount. MetLife Investment Management, which lends to companies in this segment, defines it as companies with $7.5M to $30M of EBITDA. PitchBook defines the middle market as a whole by deal size, using enterprise values from $25M to $1B.

Why it matters to a revenue leader

Many PE-backed commercial services companies start here, often founder-led with a small sales team and little formal process. The first institutional owner usually expects professional sales management: a CRM people trust, defined stages, a forecast and a pay plan tied to margin. A revenue leader in this segment builds the system that later makes the company a credible platform or a strong add-on.

A backflow testing and repair company with $18M in revenue and 6 sellers sells a majority stake to a lower middle market fund. The founder still manages the largest accounts. The new sales leader's priority is moving those relationships to the team without losing a renewal.