Does anybody have a good outline of the thresholds where expansions in valuation multiples occur? I am sure this will vary across industries, but it would be great to know some of the following:
At what revenue do multiples increase?
At what EBITDA do multiples increase?
What level of ARR is required for an increase?
Any other variables that might result in an increase would be great to know as well. Thanks in advance and apologies if this is laid out somewhere and I could not find it.
Multiple Expansion
by a searcher from Samford University - Brock School of Business
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If you combine $1 EBITDA with another $1 EBITDA vs. grow $1 EBITDA company to $2 EBITDA, the later will have a much higher price multiple, So, just adding 1+1 does not increase the EBITDA multiple.
What is QoB? It is a big topic. Some factors have been mentioned above.
Looking back, I probably did not pose the question in a helpful way as I certainly did not mean to infer that there was a "magic equation" or "hard and fast rule" that answered my question across all markets, businesses, buyers, etc. The interpretation of the question by ^Searchfunder member is what I was shooting for and his answer is what I was hoping for. My apologies for not making this clearer.