Investor Connect Podcast

Calculating Forward Multiples

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Valuations for software companies with recurring revenue are calculated using forward revenue multiples.

While revenue is the primary factor in calculating the multiple, some companies can increase it by demonstrating excellence in other areas.

Use these definitions to calculate it:

Revenue growth – revenue this year over last year in a percentage. 

Sales efficiency -- take your increase in gross profit and divide by last year's sales and marketing expenses.

Cash flow margins -- divide your cash flow by revenues.

Net income margin -- divide net income by revenue.

Gross margin -- divide gross margin by revenue.

To calculate forward multiples for companies going public, use the following formula:

Forward Multiple = 6.3 + 38 x Revenue_Growth + 2 x Sales Efficiency.

Revenue growth and sales efficiency provide the most impact.  

If you have additional value through your margins, you can add them in as well. 


Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.
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Direct download: Calculating_forward_multiples.mp3
Category:general -- posted at: 6:00am CDT

On this episode of Investor Connect, Hall welcomes Alejandra Slatapolsky, Co-founder at Scalto and host of The Biz of Wealth podcast.

Founded in 2020 and headquartered in Miami, Florida, Scalto knows how hard it is for service-based businesses to attain real scalability; exponentially increasing revenues without incurring significant costs. They are here to help Hispanic and Latin American B2B service businesses design truly scalable business models to grow over time.

Scalto focuses on enabling firms to jump ahead of the competition by designing all aspects of a truly scalable business: the offering, the client experience, the brand, and the communications and lead-generation process. It all starts with their xAlto Program, where they help you gain clarity on the problem you solve for your target audience and design scalable business solutions, from a branding and communications perspective.

The Biz of Wealth podcast talks to veterans, newcomers, innovators, and everyone in between about the evolution, future, and struggles of the wealth industry.

Alejandra is a communications and marketing leader with over 20 years of experience in B2B financial services, fintech, and technology. She has helped dozens of companies expand their businesses and create awareness through thought leadership strategies. She has designed and implemented successful communication strategies drawing from a background in marketing, strategic event planning, journalism, public relations, digital strategies, and education. 

Alejandra speaks about the startup scene in Miami, scaling your startup and the challenges faced, common mistakes people make, and more.

Visit Scalto at www.scalto.com, and on LinkedIn at www.linkedin.com/company/scaltoconsultancy

Listen to The Biz of Wealth podcast at https://thebizofwealth.com/.   

Reach out to Alejandra at alejandras@scalto.com, and on LinkedIn at www.linkedin.com/in/alejandraslatapolsky
__________________________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org  

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
For Startups check out: https://tencapital.group/company-landing/ 
For eGuides check out: https://tencapital.group/education/ 
For upcoming Events, check out https://tencapital.group/events/  

For Feedback please contact info@tencapital.group   

Please follow, share, and leave a review.

Music courtesy of Bensound.

Direct download: Alejandra_Slatapolsky_of_Scalto.mp3
Category:general -- posted at: 6:00am CDT

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