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by thih9 528 days ago
Could you elaborate? I get the part about valuation, I'd understand comparing it with profit/EBITDA, but I don't understand referencing revenue alone.
2 comments

When you sell ~50% of shares in a company for €60k, you implicitly value the total company (100% of shares) at €120k. Your tax office will also most likely (at least in my country) use that transaction to establish a fair (market) valuation.

Of course, you can structure a deal to include discounts, but you have to be careful with that too.

A new investor in one year might scoop in and say "Well, last time your shares were valued at price x, why would I pay substantially more?".

One valuation method for startups is price to revenue, given that their costs are heavily fixed/low cost of replicating the goods you're selling. I think it's much more appropriate especially for early stage startups because they virtually never make money.