Private Equity Value Creation Podcast Ep. 91: Craig Jones, TPE Boulder | Scaling Value in the Lower Middle Market through Strategic Growth
Sep 18, 2025
In this conversation, Craig Jones, a private equity investor with TPE Boulder, shares insights into scaling lower middle-market companies, particularly in healthcare. He emphasizes the importance of organic growth and operational improvements. Craig discusses strategies for aligning with founders on growth plans, managing founder dependency, and prioritizing resource allocation. He also highlights high-potential niches like neuropathy treatment, explaining how targeting these sectors can improve enterprise value and attract larger buyers with better multiples.
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High Returns In The Low Mid-Market
- Small lower-middle-market companies offer greater multiple expansion and faster percentage growth than larger firms.
- Buying at ~5x EBITDA and selling at 7–9x plus organic growth yields strong returns.
Screen With The Rule Of 40
- Use the Rule of 40 (growth + EBITDA margin) to screen scalable targets even in healthcare and software.
- Compare that score against the purchase multiple to avoid overpaying for performance.
Founder Dependency Limits Scale
- Founder dependence is the single biggest scalability limiter in small companies.
- Closing management gaps early and timing hires prevents unmanaged overhead and preserves EBITDA.
