What Really Drives Multiples
During my time as an executive at two entrepreneurial ventures, I was fascinated by valuations—valuations of companies with similar business models, valuations of companies within our industry and the trend of valuations at any given time—and, of course, what the valuation for our company would be. My fascination usually defaulted to the prevailing wisdom (or, more accurately, the urban legend) at the time of the appropriate “multiple” to use and whether it was a multiple of revenue or EBITDA. My thoughts on valuation usually began and ended with the exercise of applying a multiple to revenue or EBITDA and, more often than not, applying an extremely high multiple that spread through the industry grapevine like wildfire.
Or What Every Entrepreneur Should Consider When Starting a Business
In the summer of 2007, I made a decision that changed the trajectory of my professional career. After practicing law and advising clients for five years in Nashville, Tennessee, I had the opportunity to join an entrepreneurial technology venture. The thought of building something and being a part of a team intrigued me and the chance to do it in a high growth environment excited me. So, while my colleagues thought that I had lost my mind, I packed up and moved to Jacksonville to jump head first into uncharted waters.