Is there a rule of thumb for how much a company is sold for by using the amount they've raised as a proxy? Example: company A raised 15M in a few rounds of funding, company Z buys company A for (some_multiple)*15M.<p>Is that multiple usually 2x, 3x, 10x?
<p><pre><code> previous_year_revenue * ((growth_rate / 10) + 1)
</code></pre>
For example, a company with a 50% growth rate and $10MM in yearly revenue can be said to be worth about<p><pre><code> $10MM * ((50 / 10) + 1) = $60MM
</code></pre>
The above formula shouldn't be used to determine acquisition price. It mainly provides a sense of how much a company could be worth. Other factors to consider are intellectual property, cash balance, employee quality, etc.
7.5x on average for acquizition. I found an article by TC that answered my question: <a href="https://techcrunch.com/2013/12/14/crunchbase-reveals-the-average-successful-startup-raises-41m-exits-at-242-9m/" rel="nofollow">https://techcrunch.com/2013/12/14/crunchbase-reveals-the-ave...</a>