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Hmm ... Where did you get these multiples from? Based on what I've seen in many sources (here's one that I have at hand, by McKinsey: https://www.mckinsey.com/b
by ablekh 7y ago
Hmm ... Where did you get these multiples from? Based on what I've seen in many sources (here's one that I have at hand, by McKinsey: https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/multiples-analysis-industry-labels-dont-matter-performance-does https://www.mckinsey.com/business-functions/strategy-and-cor...), high-growth tech/IT startups are valued (and, I assume, could be acquired) at > 15x, sometimes even > 20x.
- blrgeek 7y agoFor public companies, growing > 40%, ARR > $100Mn, NDR>125$ revenue multiples are sky-high ATM. For private companies at around $1Mn-$3Mn ARR growing sub-20% YoY there are very few buyers in the first place.
- ablekh 7y agoI was definitely talking about the first category (though not necessarily public only; AFAIK there are some [many?] private companies that fit that profile). I agree that those revenue multiples are high, though I'm not sure I would refer to them as "sky-high". Who knows what kind of numbers we will see in the future ... ;-)
- einarvollset 7y agoCompared to public markets yes, but there are 100s of buyers, particularly if you’re (adjusted) EBITDA profitable, but even if just break even.
- einarvollset 7y agoPublic company multiples, VC investment valuations and lower middle market PE exit multiples are very different markets. The multiples come from direct personal experience.
- ablekh 7y agoUnderstood. Though I would expect some overlap between the first two markets. I'm curious about reasons and rationale, underlying potential differences between valuation and/or multiples within relevant categories. Any pointers or links to corresponding content, by any chance?