All the LBO modeling tutorials out there are for traditional companies (i.e. companies with tangible assets.) But there are more PE firms moving into tech and since they are usually not profitable, they use revenue multiples. So my question is, how do you model a software LBO? Other than using revenue multiples for entry and exit, are they focused more on expanding revenue? It would be great if someone can share a example.
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You'd use EBITDA. LBO Financeable Tech companies usually have very solid margins and a history of stability. No collateral like you said so the credit needs to have a solid story.
Not sure what apes are tossing shit at you, this is correct. Literally part of the main thesis of Vista and every other big enterprise SaaS investor.