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by LaurentVB 3636 days ago
I'm sorry, I'm probably missing something, but... Why even sell when you only get 1y of revenue from the sale?
2 comments

Assume you have a 20% margin, then one year of revenue equals five years of profit, or a 5X profit multiple. It may not be ideal, but if the alternative is raising more money, increasing your risk, it's attractive. Also, VCs need liquidity so 1X on a large number today is more attractive than 3X you many never achieve.
Because it's one year's revenue, not profit.