Enterprise Value (EV) to Next Twelve Month (NTM) revenue multiples in public markets for SaaS businesses rose sharply from 2019 to 2021 up to as high as 24x. Now, those multiples are falling below pre-pandemic levels to 10x. This has major implications for retail investors, VCs, and running a startup during a recession.
For example, startup fundraising rounds will come down (potentially for a long time). Growth is less valuable than revenue. Monetizing late stage valuations probably won’t work right now.
Read What Does the Post Crash VC Market Look Like? from Mark Suster.