A Smart Bear: Startups and Marketing for Geeks

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Why large companies acquire small companies

A Smart Bear: Startups and Marketing for Geeks

The reason they want to trade balance-sheet assets for strategy-execution, is that (healthy, growing) software companies are valued on their P&L, i.e. the size and growth of income and earnings. Remember this is revenue , not valuation. Zoom out to see the strategic decision. In no case does it mean $10m/yr or less.

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How to value your company for sale (Part 1)

A Smart Bear: Startups and Marketing for Geeks

They’ve heard rules of thumb like “A growing software company is worth 5 times their trailing 12-months revenue.&# Or a company like Zappos (who was famous, growing, and profitable) still got only a 1x sales valuation when bought by Amazon because of thin margins. Many people start by looking at “the Multiples.&#

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