What's Your Business Worth?
When founders begin exploring a sale, the first checkpoint is value. In this video, Kirk Michie breaks down how buyers price companies in the real world—typically as a multiple of revenue (for recurring models) or adjusted EBITDA—without resorting to heavy, theoretical models. He also shows how to sanity-check your own number and which questions to ask active bankers to align with current market data.
What’s Your Business Worth? A Founder’s Practical Starting Point
At the top of the “getting deal-ready” funnel sits a simple question: what is my business worth? For most founder-led companies, buyers don’t start with elaborate discounted cash flow models. They look at transferable economics today and apply market multiples.
Two common bases for value
Revenue multiples (often for recurring models). If you’re a software or subscription business with durable recurring revenue, buyers may quote value as X times recurring revenue. The quick check is to look at net recurring revenue (recurring revenue minus churn) and apply the prevailing market multiple.
Adjusted EBITDA multiples (for many operating businesses). Start with net profit, then add back interest, taxes, depreciation, amortization—and typical owner or non-recurring items—to get adjusted EBITDA. Buyers and bankers will reference recent comps to frame a multiple range.
Simple illustrations from the video
$5M in annual recurring revenue at a 5× market multiple ≈ $25M (top-line, before fees and taxes).
$8M of adjusted EBITDA at 7–8× ≈ $56M–$64M (pre-fees, pre-tax).
Tie valuation to life goals
Value matters because net proceeds fund what’s next. A useful lens is: after taxes and costs, does this number endow the rest of my life or sufficiently fund my next chapter? That clarity helps you decide whether to move from curiosity to planning.
Ground your range in live market data
Talk to active transaction professionals—investment bankers or brokers who regularly execute deals in your space and size. Ask for:
Recent precedent transactions and ranges they’re seeing
Multiples paid by serial buyers (private equity and strategic acquirers)
How your revenue mix, growth, margins, and moats could affect the multiple
What this is not
For go-to-market valuation, you typically don’t need a complex DCF. Buyers anchor on what they can underwrite today (revenue/EBITDA/assets) and adjust with structure later.
Start with the market’s language—multiples of recurring revenue or adjusted EBITDA—pressure-test with practitioners, and then decide if the potential net outcome meets your goals. Once you have that, you’re ready for the next step in the funnel.
