They Got Acquired - Our guide to sale multiples 👉

Jan 7, 2025
​Read on web​

We're feeling extra energy around the turning of this New Year because M&A activity is beginning to pick up after a tough couple of years.

In 2025, we're hoping to see an increasing number of founders in our community prepare for a sale and take it through to close.

If selling is on your radar this year, press reply and let us know!

We have so many free resources for founders, and we recognize it's not always easy to find the ones that are most applicable for your specific business. We're happy to point you in the right direction.

With the expectation of more M&A opportunities this year, we're offering more tools to help you get your ducks in a row, including:

• Webinars sharing strategies other founders have used successfully, so you can learn with us live (coming soon!)
• I'm personally opening 7 spots on my calendar this month to chat with founders who want to sell in the coming year (you're a fit if revenue is between $300K - $25M)
• ​More reports about companies that have sold, so you can see how other founders do it

Plus, we're kicking it off today with a new guide to sale multiples.

We get this question often: What multiples are you seeing for my type of business? So we asked some of our M&A advisor partners what multiples they're seeing for SaaS, media, e-commerce and agencies.

We compiled their answers into a brief guide:

Of course, multiples are only a guide; so many factors go into valuations.

We talk about some of those nuances below.

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Sale multiples for online businesses

Here's a quick overview of how multiples work, and how you should – and shouldn’t – use them to value your business.

If you're new to this, a revenue or EBITDA multiple is a financial metric used to evaluate the value of a company.

Once you know the common multiples for your industry, you can multiply that by your company’s revenue or EBITDA to develop an approximate valuation for your business.

Here’s an example:

Say your business brings in $1 million in revenue, and most businesses like yours sell for about 3x revenue. In theory, your company could sell for around $3 million.

But here’s the tricky part about multiples...

They should only be used as a rough guide for valuing your business, not a hard rule.

That's because so many variables can affect your valuation, including...

Growth rate: Buyers want to buy businesses that are growing, so they’ll pay more for a fast-growing company than one that’s growing slowly or plateaued.

Market conditions: Most advisors say you shouldn’t try to time the market, and should instead sell when the timing is right for your business and for you personally. But there are times when the market is willing to pay more for specific types of businesses.

Type of business: Different types of businesses tend to be valued differently. SaaS businesses, for example, typically sell for higher multiples than e-commerce companies and agencies.

Size of business: Bigger companies tend to see higher multiples. And sometimes the size of the company affects whether a revenue or EBITDA multiple is applied.

Owner dependency: How much of the business relies on its owner vs. having a successful team in place can also affect the multiple.

We go into more detail about how multiples work and how you might think about them for your business in our latest post:

​How much is your business worth? Common multiples for online businesses​

That post also includes real multiples that different types of businesses are seeing right now, as we head into 2025.

See you next time,

Lexi Grant
Founder & CEO
​They Got Acquired​