Valuation Multiple

Definition

A ratio like revenue or EBITDA times some magic number to justify paying absurd prices for companies, used in tech acquisitions constantly.

Example Usage

We valued the startup at 10x revenue, which is insane, but venture capital has destroyed our ability to price things rationally.

Origin

M&A and investment valuation terminology

Fun Fact

Valuation multiples expanded dramatically in the 2010s-2020s during tech bubbles, often collapsing back to sanity

Source: Mergers & acquisitions and valuation terminology

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