German enterprise software startup aifora just raised €3 million from Capnamic.
Price
Assume, based on comparable deals, that aifora sold a 20% equity stake in their company to Capnamic.
Price startup = price deal / equity stake sold.
Then aifora is priced at €3 million / 20% = €15 million post-money.
Exit
Assume, based on comparable deals, that Capnamic wants to have a shot at making 10x on their investment.
Exit value = price startup * money multiple.
Then aifora’s €3 million raise requires a €15 million * 10 = €150 million exit value.
Revenue
Assume, based on comparable companies, that aifora trades at 5x revenue at exit.
Annual revenue at exit = exit value / revenue multiple at exit.
Then aifora’s €3 million raise requires €150 million / 5 = €30 million in annual revenue at exit.
Originally published at venturevalue.com on February 4, 2019.