Valuation Methods for Growth Investing Funds
For those of you at growth(y) investing shops, what are the typical valuation methods do you utilize? How much emphasis do you and the team put on valuation?
Trending Content - Asset Management Forum
Career Resources
Both Valuation (McKinsey) and The Dark Side of Valuation (Damodaran) have chapters on how to value growth companies.
For software growth investments, multiple of ARR informed by growth rate and gross margin.
How would you know if the multiple is sensible. The multiple for high growth SaaS companies has now been expanding for almost a decade, with no end in sight.
Agree with increasing trend in multiples. For a relative comparison you could plot “rule of 40” vs ARR multiple.
Natus eos unde minima qui laboriosam eos sequi est. Minima expedita quia voluptatem sit vel vitae nam excepturi. Deserunt aut sint cum facilis consectetur.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...