From a founder- the f is going on
Founder of an AI SaaS platform. 7 years old, crossed $30m rev last year on track to do $90m this year. 90% gross margin, 30% ebidta margin.
Ran for a minority recap this year. Had interest from every major fund but ended up with 2 shitty bids (10x last year rev). The universal sentiment was “we love your business but our IC can’t get comfortable with a higher price.”
We’re turning down the sheets but is this normal out there? What kind of deals are happening?
So this year you’re at $30M of EBITDA and they’re offering you 10x that at $300M?
Doesn’t make sense if your growth is sustainable at anything close to these margin levels.
So do they not believe the growth plan and moat?
Either way, probably a blessing to avoid investors that aren’t aligned with your vision.
He said 10x LTM Rev fwiw
Same $30
$90mm this year let’s say 25% growth annually next five years. So $270mm revenue 30% mgn is $80mm of EBITDA. Exit at 5x EBITDA is $400mm EV plus cash build to get to maybe $5-600mm of equity value
Paying $300mm for a double seems pretty reasonable bar.
Look at every SaaS company that is public. Intuit, Adobe, Workday, etc are growing 10-20% and trading at 5-10x EBITDA. Do you deserve a higher multiple than that in five years? That is probably the question IC is asking (maybe you disagree on my 25% annual growth assumption but the dollars added is still quite high)
Workday trades at 20-25x, down from 80x L3Y avg. What am I missing.
On the face, 5x EBITDA for this kind of company makes me blink, to say the least. Do you mean 5x revenue?
WDAY is 8x EBITDA on cy27 numbers. Yes there is SBC but assume the OP is adding back sbc to his too. ADBE is closer to 6x I believe
You're asking why valuations for a SaaS company is lower than it used to be?
Have you been living under a rock...?
Sounds like people don’t believe the $90 at this point in the year. What’s run-rate right now, and how believable is the bridge?
Sounds like they view your company as more SaaS than AI. The ZIRP multiples are never coming back big bro #RIP
what’s your gross/net retention/what category of software is this? I have not seen valuations come down for A assets in any of the processes we’ve been in and I also spend all my time in minority growth/recaps
that's quite an accomplishment for a 7 years old
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