[terryjsmith]

I would argue that they're definitely made up, but not completely bullshit. It's a yardstick for a sale price: if the investors need to get out at least X, then that's a good starting place to start shopping the company around. If the entrepreneur is forward thinking it also means they know they need to find a way to get annual revenues up to $Y to justify the investment and give back any semblance of a return. So not a great judge of a company's "worth", but outside of revenue, probably the best thing we have.