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I'm sorry, I'm probably missing something, but... Why even sell when you only get 1y of revenue from the sale?
by LaurentVB 10y ago
I'm sorry, I'm probably missing something, but... Why even sell when you only get 1y of revenue from the sale?
- replicatorblog 10y agoAssume you have a 20% margin, then one year of revenue equals five years of profit, or a 5X profit multiple. It may not be ideal, but if the alternative is raising more money, increasing your risk, it's attractive. Also, VCs need liquidity so 1X on a large number today is more attractive than 3X you many never achieve.
- grenoire 10y agoBecause it's one year's revenue, not profit.