Revenue is largely a function of marketing effectiveness/marketing spend coupled with a minimum product/market fit. If someone has a legit internet software product bringing in $500k a year, they'd have to be pretty silly to sell it for $1.5M - unless they're really desperate for cash or hit a scale/product/market/ops ceiling they cant crack.
Capital is free flowing at the moment and a legit revenue-generating, valuable, scalable business shouldn't have to cash out this early or this low.
This 3x yearly earnings is mentioned quite often. But I can't believe anybody is selling for this. Maybe for 5x if you are in need of money.
And in times of zero interest rates this 3x thing sounds even more unbelievable.
Well software isn't like a lot of businesses. A plumbing supply company will probably be just as successful in 3 years as it is now, but a software company might be worthless. Three years is a long time in software.
