Learn how to properly value online businesses using industry-standard methods and multiples.
Value based on annual revenue, commonly used for high-growth companies.
Business Value = Annual Revenue × Multiple
Seller Discretionary Earnings - most common for small businesses.
Business Value = SDE × Multiple
Earnings before interest, taxes, depreciation, and amortization.
Business Value = EBITDA × Multiple
Based on recurring revenue, standard for subscription businesses.
Business Value = ARR × Multiple
| Industry | Revenue Multiple | SDE Multiple | Notes |
|---|---|---|---|
| SaaS | 3x - 10x | 3x - 5x | Higher for low churn, high growth |
| E-commerce | 1x - 3x | 2x - 4x | Depends on brand strength |
| Content/Media | 2x - 4x | 2.5x - 4x | Traffic quality matters |
| Marketplace | 2x - 5x | 3x - 5x | Network effects valued |
| Agency | 0.5x - 2x | 2x - 3x | Client concentration risk |
| Apps | 2x - 6x | 3x - 5x | User growth important |
* Multiples are approximate ranges and can vary significantly based on specific business characteristics, market conditions, and deal structure. Always conduct thorough due diligence.