I'm looking at some business that sell between a 3-5 multiple, However, I want to be more accurate when giving these businesses a multiple. So, instead of just making a educated guess and saying that a particular business has a 3.5 x multiple, how do I come up with a better way to give these businesses a more accurate multiple. Say for example, maybe I use a scorecard.
Does anyone have experience doing this? Does anyone have a template that I could use?
Multiple for valuation! Any idea how to come up with it?
by a searcher from University of Massachusetts at Boston
More on Searchfunder
Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
Additionally, keep in mind that some acquisition models include "multiple arbitrage" that feeds into the exit strategy section of the plan. Make sure the multiples you're pulling do not include that as it is highly variable.