Sam Jacobs: Valuation Premium of Growth over Free Cash Flow Fell to 3-to-1
Sam Jacobs · How Pavilion Hit $10m in Revenue While Balancing Investor and Customer Demands with CEO Sam Jacobs · Aug 6, 2024 · at 14:35
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Sam Jacobs, CEO of Pavilion, discusses the shift in software valuation multiples away from growth-at-all-costs toward capital efficiency and cash flow generation.
0:00 / 0:19exact quote · 19.8s
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“It used to be growth at any cost, which means that growth really was worth almost, not infinitely more, but probably maybe 15 to 20 times what Free cash flow was worth today. We're in a world where growth is still more valuable than free cash flow, but only three to one, right? So growth is now compressed from being worth probably 15 to 20 to one down to three to one.”
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