The Equity Kicker

DECEMBER 2, 2015

At the end of the day a business is worth the net present value of future cash flows, EBITDA is a good proxy for cashflows, and future EBITDA is a function of revenues today, revenue growth and EBITDA margin. Hence the revenue multiple is directly linked to growth and margin.

Forecast 60

Forecast eCommerce Net Present Value Revenue 60

ReadWriteStart

AUGUST 26, 2022

So they have about 60 million customers now, and they have a view of the net present value of each customer when they’re onboarding them and their models to show it. So they have quantifiable risk profiles and ultimately map them to lifetime value, right? That’s a valuation number and pricing number.

Partner 132

Partner Cofounder Retention Acquisition 132

David Teten

NOVEMBER 15, 2013

The average equity fund investor earned a market return of only 4.25%. I don’t think that a Net Present Value calculation is appropriate for every company. This is a key reason why the average retail investor consistently earns below-average returns. I can only think of a few exceptions to this zero-sum principle.

Management 114

Management Pre-Money Valuation Venture Capital New Hampshire 114