What are EBITDA adjustments and why do they matter?
While there are many factors that influence the valuation of a business (including size, profit margins, historical growth, growth potential, competitive positioning, and customer concentration), one of the most closely scrutinized metrics is earnings before interest, taxes, depreciation, and amortization, or EBITDA. The calculation of EBITDA is generally quite simple from an income statement. However, […]
8 factors driving software valuation multiples
Public software company valuations have risen to astronomical levels in recent years. Valuations for small privately held software businesses are strong as well and can vary significantly from one transaction to the next. What drives a 2x revenue multiple vs. a 10x revenue multiple? Some key factors influencing transaction multiples include: Size: larger companies […]
How has the COVID-19 pandemic changed the deal process?
It’s been remarkable to see the rebound in deal activity in the last few months and to observe the M&A process shift to virtual settings. A few things that we’ve observed: Most or all of the deal process can be done remotely. Most meetings can be done over videoconferencing, and most diligence can be done […]
When is the right time to sell a business in a pandemic?
Many business owners who were considering selling their business pre-COVID-19 are now trying to figure out the implications of the crisis on starting a sale process. A few factors to consider: Evaluate how hard your business has been hit by the crisis. Valuations may be close to pre-COVID levels for businesses that remained relatively stable […]
What I’ve learned from working at home with young children
The COVID-19 crisis has blurred the lines between work and family for many people as we are all at home with our children, all the time. As we close out week seven of working from home, it’s starting to feel, if not easy, slightly less chaotic and more manageable. From speaking with colleagues with children […]
Four things to do now to prepare your business for due diligence
A deal isn’t done when the terms are agreed to in an LOI and is still subject to further due diligence at that point. An acquirer will want to do a detailed review of almost every aspect of your company’s operations. Below are a few of the most common issues that come up in due […]
Five reasons why 2020 is the right year to sell your business
Small business owners often struggle with the question: when is the right time to sell my business? While there’s no “one size fits all” answer and there may be a myriad of reasons to stick with a business and reinvest over the longer term (based on the owner’s age, risk profile, the maturity of the […]
Open Source and the impact on Selling your Software Business
Now before I start, let me say that this is not a judgement on the use of open source as a part of your development strategy. My opinion is that in general that open source initiative has been a great boon to the software development community and by sharing code and tools, developers have saved […]