Multiple Of Earnings Vs. Revenue
Glenn Grant started G2 Technology Group which was in the business of helping website developers host their sites with Amazon Web Services (AWS).
By 2018, Grant had built his company to 30 employees and was planning to grow further by acquisition. That was around the same time he began fielding calls from Private Equity Groups (PEGs) interested in buying G2. The PEGs were throwing around valuation multiples of revenue instead of EBITDA. Grant decided to switch strategies and instead of being an acquirer, agreed to be acquired.
In this episode, you’ll learn:
- The difference between a financial and strategic private equity group
- How stock appreciation rights are different than options
- Why your company’s culture impacts its value
- How reputational equity as a channel partner can boost your value
- How the sales process differs from an auction (and why in many cases its better)