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> By any yardstick, a price/sales ratio of 72 is ludicrous. It's the kind of thing that can only happen within the safety of a financial bubble. If not 72, wha
by mavelikara 4y ago
> By any yardstick, a price/sales ratio of 72 is ludicrous. It's the kind of thing that can only happen within the safety of a financial bubble.
If not 72, what revenue multiples are more appropriate as per the yardsticks you are familiar with?
- drc500free 4y agoSingle digits, going to low double digits in some industries. Here are a few industry averages: https://eqvista.com/revenue-multiples-by-industry/ https://eqvista.com/revenue-multiples-by-industry/
- JamesBarney 4y agoOne of the industries is Computer Software: Prepackaged Software 112.17% 17.81 And that doesn't take into account that Substack is doubling every 6 months So Substack is 2 doublings or 12 months away of growth from bringing it's multiple to the industry standard, that might be an aggressive evaluation but it doesn't seem insane. [0] https://www.statista.com/statistics/1243565/substack-paid-subscribers/ https://www.statista.com/statistics/1243565/substack-paid-su... * Not to mention most VC deals are sweeter than a pure purchase (in terms of being protected from a down round etc.. *