There’s a difficult strategy question that I hear a lot from mid-market healthcare CEOs:
“Do we have time to slow down and get better before we get bigger? Or should we keep pushing for fast growth at all costs?”
It’s usually framed as an operational priority question, but it’s also a valuation question. Fast versus slow is the wrong question when it comes to exit readiness and getting premium multiples when you sell.
Savvy investors and buyers know to inspect the durability of revenue, not just speed. Fast growth can absolutely command a premium, but only when its durability is verifiable.
If there is no proof, if it sounds complicated, or growth is disconnected from controllable levers, it becomes a liability during diligence.
In our Exit Readiness Framework, durability of growth is one of five valuation signals buyers consistently test in diligence. Let’s unpack why.
In operating mode, fast growth feels great. Revenue is up. The board is energized.
In underwriting mode, growth is interrogated more comprehensively. A PE investment committee isn’t asking, “How impressive is this topline revenue?”
PE firms are asking:
Strategic acquirers are asking something slightly different:
Second buyers, especially if the company has already been through one private equity cycle, ask the most pointed question of all:
Fast growth without durability looks like more work and future risk, and buyers price in future work. That’s why the durability of growth is a key signal for exit readiness.
A mid-market healthcare company we worked with had grown quickly through a high-performing partnership channel. Revenue was accelerating. But when diligence began, a PE investment committee started pressing on concentration risk.
One partner accounted for nearly 40 percent of new revenue.
Sales process documentation was thin. Positioning shifted slightly depending on who was selling.
None of this showed up in monthly reporting, but it showed up in underwriting. What felt like impressive growth internally looked like exposure externally. The multiple adjusted accordingly.
Nothing was fraudulent. Nothing was reckless. It just wasn’t durable enough to command a premium.
Fast growth is adding floors. Durable growth is reinforcing the foundation.
If you add ten floors to a building with stress fractures in the foundation, the asset becomes risky.
From the street, both buildings look taller. From the inside, only one is safe to buy. Savvy buyers are structural engineers. They can and will inspect the structural integrity of your business.
We’ve seen all of these celebrated in operating meetings:
None are inherently bad. They just require a durability plan. Without one, they introduce fragility and risk that later surface in diligence.
Fast growth increases valuation when:
Fast growth decreases valuation when:
The difference is structural integrity.
At Legacy DNA, we specialize in helping healthcare companies with aligning growth, narrative, systems, and leadership. We make the business easy to understand, underwrite, and transfer.
When leaders slow down to clarify:
They accelerate the right kind of scale. That’s speed with durability. That’s clarity with leverage. That’s impact that shows up in valuation.
Durability wins. Fast growth can command a premium, but only when durability is verifiable. Strengthen the foundation so you can scale with confidence. Buyers pay premiums for confidence.
If you’re interested in learning more about the other top 5 signals buyers look for in a growth story, download our Exit Readiness Signals Framework.
Learn more about how buyers evaluate narrative clarity, growth quality, operational transferability, leadership depth, and market credibility before setting valuation.
