
Ask HN: Raise vs. Acquire multiple rule of thumb? - dynofuz
Is there a rule of thumb for how much a company is sold for by using the amount they&#x27;ve raised as a proxy? Example: company A raised 15M in a few rounds of funding, company Z buys company A for (some_multiple)*15M.<p>Is that multiple usually 2x, 3x, 10x?
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baccheion

        previous_year_revenue * ((growth_rate / 10) + 1)
    

For example, a company with a 50% growth rate and $10MM in yearly revenue can
be said to be worth about

    
    
        $10MM * ((50 / 10) + 1) = $60MM
    

The above formula shouldn't be used to determine acquisition price. It mainly
provides a sense of how much a company could be worth. Other factors to
consider are intellectual property, cash balance, employee quality, etc.

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dynofuz
7.5x on average for acquizition. I found an article by TC that answered my
question: [https://techcrunch.com/2013/12/14/crunchbase-reveals-the-
ave...](https://techcrunch.com/2013/12/14/crunchbase-reveals-the-average-
successful-startup-raises-41m-exits-at-242-9m/)

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samblr
Current market evaluation.

