I'm seeing in differnt articles on the Internet that my earnings multiple could be anywhere from 3-9 times revenue. How can I get a better defined number? For example, if my business was making 1 million in revenue and I sold it off at a 5x multiple it would be worth 5 million (excluding discounts). I just don't know what multiplier to use.
You will need to provide more information in order to try and assess a reasonable value. The valuation metric and stage of your company will both be key drivers in trying to assess the value of your business. Earlier-stage SaaS models will typically be valued on a revenue multiple basis, but these valuations are more of an art than a science. Other factors include industry/sector-related KPIs, recent funding activity of similar companies and even geography. When you move into more mature SaaS models, EBITDA becomes a much bigger part of the equation. Happy to discuss further if you want to provide additional information.
Answered 9 years ago
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