Growth equity valuation?
Hi guys:
Looking to go from buyout to growth equity... How does growth equity value high-growth companies with negative EBITDAs? How does one go about finding whether certain valuation ranges are reasonable (even if it's looking at TEV/Rev, TEV/ fwd EBITDA, etc.)?
Any sources of information would be appreciated!
The jump is not as bad as you might imagine. There are a number of approaches - some combination of ARR, margins and growth rate. Check out rule of 40 etc.
Like buyout there is a bunch of qualitative assessment and quantitative (cohort analysis, LTV to CAC) that can help separate higher and lower quality businesses.
Would anyone be willing to share examples of growth equity case studies, or advice on how to prepare for interviews / what to expect?
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