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I’m not sure I agree. I hear from lots of people wanting to buy my business IF it’s making at least $5 million/year (it’s not). $500K/year might get you a 2X
by DougN7 3y ago
I’m not sure I agree. I hear from lots of people wanting to buy my business IF it’s making at least $5 million/year (it’s not). $500K/year might get you a 2X exit, and $1M is nothing to sneeze at, but it’s not early retirement money.
- brianwawok 3y agoFor a non-strategic buy you are right. For a big 1B PE fund, they can't be arsed to buy a bunch of 300k a year companies. I think its just too much to manage. So the higher in the millions you go, the more PE type people it can appeal to.
- indymike 3y ago> $500K/year might get you a 2X exit, Depends. When a company is subscale it's purchase price varies wildly. This is because standard revenue x multiple thinking just doesn't make sense when: * you are buying the team (leaders, skill positions, etc) * you are buying the tech (which may have great value in accelerating go-to market or adding competitive advantage) * The small company holds key contracts * IP has great value As companies grow, they tend to get valued more traditionally...