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This # sounds very low. Generally public companies sell for many times this. Is this because so much of the equity in side projects is tied up in the owner?
by mathattack 11y ago
This # sounds very low. Generally public companies sell for many times this. Is this because so much of the equity in side projects is tied up in the owner? Or that there isn't growth? I frequently see software firms selling for 8 times revenue.
With interest rates so low, it seems like businesses with recurring revenue that can recoup their costs in 3 years are a steal.
- nedwin 11y agoStock in a public company is far more liquid. A larger software company is also likely to have employees, big clients etc. If you're looking to sell and walk away from a founder-run SAAS startup 3x is about right. Add multiples if you have employees, long term contracts, significant market share etc etc.