A guide and calculator for estimating the enterprise value of private companies. Includes links to free resources to help estimate private company revenues and industry median Enterprise Value/Revenue multiples
Category: Private Equity
The Software Equity Group (SEG) has published their 2019 Annual Report that analyzes 2018 software M&A transactions. SEG consistently publishes comprehensive, free, analytical research on M&A transactions. The 93 page report is chockfull of stats and trends including EV/Revenue, EV/EBITDA multiples, revenue growth, margin growth, and EBITDA growth and trends over the past three years. […]
Pitchbook and the National Venture Capital Association (NVCA) collaborated on a recently published study on VC and PE activity in 2018. The highlights cover 18 key trends. Here are a couple illustrative findings: Private Equity involvement in VC deals has risen to a 10 year high $25M+ Deals Now Represent the Majority of Early Stage […]
Accounting Goodwill has to be one of the more boring and esoteric financial topics. There are situations where product managers can benefit from having a basic working knowledge of it. Goodwill could impact their future bonuses and level of funding for their product lines. Goodwill Basics Investopedia defines goodwill as: “Goodwill is an intangible asset […]
Private equity EV/Revenue multiples have increased 70% since 2000. They averaged 10.3x for the first three quarters of 2018 versus 6.6x in 2000. AS a result of these higher valuation expectations, the traditional private equity playbook of acquire, cost restructuring, and flip based on financial engineering are being disrupted by growth equity PE players like Vista who demonstrated the success of this model through the acquisition and sale of Marketo. Vista acquired a struggling Marketo in 2016 for $1.75B, improved it, and sold to Adobe a little more than two years later for $4.75B.
I am launching a new side gig today vendorbumper.com. We provide research reports on software companies for buyers looking to build a basic profile of a firm or for marketers looking to update their competitive analysis. Gartner notes that buyers complete 70% of their buying journey before contacting sales. Unfortunately buyers often need to provide […]
Excerpted from the CBInsights article. Read the entire piece here: https://www.cbinsights.com/research/bezos-amazon-shareholder-letters/ Since founding Amazon in 1994, Jeff Bezos has run his company according to an unconventional set of core principles: don’t worry about competitors, don’t worry about making money for shareholders, and don’t worry about the short-term. Focus on the customers, and everything else will […]
Mary Meeker from Kleiner Perkins is the undisputed leader in using big data to describe and analyze the major trends in the tech industry. She and KPCB have published a renowned annual research report since 2001. Take a look at her analysis from 2002 and her 2018 report. The differences and trends are fascinating.
I came across two interesting articles today in my daily reading, both focus on how venture capital and private equity may be hurting our economy. As the stock market continues to climb to new record highs and GDP continues strong growth (4.2% revised upward for the second quarter) I think more and more about a bubble and that bubble bursting. In my career I have been through a number of economic slowdowns and recessions. In the 1980’s it was the recession in the auto industry, in the early 1990’s it was the recession after Gulf War I, then the dotcom boom and bust of 2000, and the great financial crisis of 2008.
The following presentation presents a basic approach that can be used to develop a merger/acquisition strategy for your business. It is especially geared towards product managers that are interested in exploring the pragmatic aspects of M&A for their company.