PE exit activity rose 21.9% year-over-year in Q4 2025, according to PitchBook data — a real acceleration after years of compressed deal flow. But volume and value are not moving together. Buyers are refusing to pay 2021-era multiples, sellers are resisting markdowns, and the assets caught in between are the ones where the value creation story isn't legible enough to close the gap. For operating partners accountable for exit outcomes across a portfolio, that gap is now a GTM problem as much as a finance problem.
The Window Is Open. The Burden of Proof Has Shifted.
A rising exit count is not a rising tide. It is a selection event. The deals clearing are the ones where buyers can underwrite a credible forward revenue story — not just audited historicals. The ones stalling are the ones where commercial performance is either weak or simply unreadable to an outside buyer.
This is the structural condition operating partners are working inside right now: the market is moving, but the valuation mismatch persists because sellers and buyers are arguing over different things. Sellers are defending what the asset was worth at peak. Buyers are pricing what the asset can demonstrably grow into. GTM instrumentation — or the absence of it — is what determines which side of that argument you're on.
72% of Firms Have a KPI Problem at Exit. Most Don't Know It Until It's Too Late.
The EY Global PE Exit Readiness Study 2026 found that 72% of firms cite weak KPI data as the number-one finance issue at exit, and that commercial readiness consistently lags financial preparation. That asymmetry is predictable: CFOs build financial reporting infrastructure early. GTM reporting infrastructure gets built reactively, when a process starts and the data room needs to be populated.
By then, the damage is done. Inconsistent pipeline definitions across holdings, CAC figures that can't be reconciled quarter-over-quarter, ICP assumptions that live in a sales leader's head rather than a documented framework — these are not cosmetic issues. They are the inputs a buyer's commercial due diligence team will probe hardest, and the gaps that compress valuation or kill conviction.
The same EY study found that 86% of GPs say preparation started 12 to 24 months early improves valuations — but only 20% of CFOs operate in an always-exit-ready posture. The math on that gap is the operating partner's problem to solve.
Multiple Expansion Is Gone. Revenue Growth Is the Job.
For most of the last decade, PE value creation had a tailwind that required no operating skill: multiple expansion. That tailwind is gone. Research from Gain.ai now puts revenue growth as the driver of 54 to 71% of PE value creation as multiple expansion fades. The implication is direct: if your portfolio companies are not growing revenue in a defensible, documented way, you are not creating value — you are waiting.
The 2026 Benchmarkit SaaS Report adds a sharper edge to this. CAC payback hit a 16-month median in 2025, and Rule of 40 gains across SaaS were margin-led, not growth-led. Margin discipline is necessary. It is not sufficient. A buyer underwriting a growth multiple needs to see a growth engine — a defined ICP, a repeatable motion, a pipeline that converts at a predictable rate. Margin without growth is a cost-cutting story. Cost-cutting stories don't command premium multiples.
GTM Is the Least-Instrumented Function in Most Portfolios. That Is Now a Valuation Risk.
Operating partners have built real capability around financial reporting, legal compliance, and operational KPIs. GTM remains the function where comparability across holdings is lowest, governance is weakest, and board-level visibility is most dependent on whoever is running sales at any given company.
That was a manageable gap when multiple expansion was doing the heavy lifting. It is not manageable now. When revenue growth drives the majority of value creation and buyers are scrutinizing commercial readiness with the same rigor they apply to financial audits, GTM instrumentation is not a nice-to-have. It is a board-defensible operating requirement.
The specific failure mode: a portfolio company reaches a process with strong EBITDA but cannot produce a coherent ICP definition, a documented customer acquisition model, or a revenue forecast with visible assumptions. The buyer's team discounts for uncertainty. The multiple compresses. The gap between seller expectation and buyer offer widens — not because the business is bad, but because the commercial story isn't legible.
What This Means for Operating Partners: Three Moves
1. Install GTM diagnostics now, not at process launch.
The EY finding on early preparation is unambiguous. If you are 12 to 24 months from a target exit on any holding, the time to assess commercial readiness is today. That means a structured diagnostic — pipeline quality, ICP documentation, CAC and payback visibility, retention cohort clarity — not a sales review.
2. Build portfolio-wide comparability into GTM, not just finance.
Board and LP reporting on revenue should be as structured and comparable across holdings as financial reporting. That requires named instruments: a consistent Revenue Readiness Index, standardized ICP and persona frameworks, value-creation roadmaps with GTM milestones. These artifacts need to survive leadership turnover and travel into every portfolio review.
3. Separate margin story from growth story — and have both.
Margin-led Rule of 40 performance is not a growth narrative. If your holdings have improved margins but growth has been flat or declining, the exit story needs a credible account of how growth reaccelerates. That requires documented GTM infrastructure, not a slide deck built four weeks before the process opens.
FAQ
Why are PE exit valuations still compressed even as exit volume rises?
Volume and valuation are driven by different conditions. Exit counts rose 21.9% YoY in Q4 2025, but buyers are pricing assets on forward growth credibility, not historical peak multiples. Where commercial readiness is weak — undefined ICP, undocumented CAC, inconsistent pipeline data — buyers discount for uncertainty. The valuation gap persists because the commercial story isn't legible enough to close it.
What is the biggest GTM mistake PE-backed companies make before an exit process?
Building commercial documentation reactively, when the data room opens, rather than operating with exit-ready GTM infrastructure continuously. The EY Global PE Exit Readiness Study 2026 found only 20% of CFOs operate in an always-exit-ready posture — and commercial readiness lags financial preparation even among those that do. By the time a process starts, the gaps are already priced in.
How should operating partners think about GTM as a portfolio governance function?
The same way they think about financial reporting: as a comparable, board-defensible capability that doesn't depend on any single leader at any single company. That means standardized diagnostics, named frameworks that travel across holdings, and revenue metrics that can be presented at the LP level with the same rigor as EBITDA. GTM that lives inside a sales leader's head is an exit risk, not an asset.