Valuation Multiples

“I always tell my students, you have to earn the right to use a multiple. In other words, you can demonstrate that you understand what the economic implications are. That always bothers me that people are very comfortable throwing around heuristics or multiples…”

“There's no snapback, you know, even if you say, earnings take time to grow. Earnings don't typically, at large, grow in multiples. They grow in You know, increments, percentages, and when that happens, markets grow and valuations grow, but there's no catalyst …”

“In every down cycle, initially it's the multiples that correct, and then it's the earnings that correct, while the multiple stays the same.”

“You get higher multiples of your valuation.”

“One of the, like, methods and tactics there that I used in terms of negotiation is really, you know, talk about valuation multiples that are higher on the current AR, and then with the board, talk about the multiple at the close of the transaction. So you can …”

“It's most likely to go up, then go down, particularly because it's beginning to normalize, and multiples are a third of what you have elsewhere in the world.”

“The iron law of investing is interest rates. A one percent change in rates leads to a 15 or 20% change in a multiple.”

“The folks that are getting the highest multiples on their series A rounds are not the ones going revenue the fastest. It's the ones that have the highest net dollar retention, you know, one, 21, 30%.”

“Most people don't know how to properly use valuation multiples, and the idea that multiples flow from proper valuation and DCF technique and are not a driver of it, And therefore what happens is people make a lot of mistakes. They do maybe good quantitative or…”

“So a bigger valuation multiple is not always what you want. I'm always a big, big fan of it's gotta be fair for both parties. And that includes the terms as well as the valuation multiple, you know, but you have to be able to grow into that and, you know, the …”