What is my company actually worth?

Founders ask what their company is worth. Buyers ask a different question: what will this business produce for me, how sure am I, and what do I have to do to keep it running. Every valuation method is just a way of putting a number on that second question.

So before any arithmetic, be honest about which kind of business you have. A company where revenue recurs whether or not anyone makes a call is a fundamentally different asset from a company where revenue restarts at zero every January. They can have identical revenue and a valuation gap of five times. That gap is not unfair — it reflects what the buyer has to do the day after closing.

At this size there are only two that matter in practice.

A multiple of revenue is used when growth is the story and profit is deliberately suppressed to fund it. This is the standard for software. Revenue is stated as ARR — annual run rate, not trailing twelve months — because a buyer is purchasing next year, not last year.

A multiple of owner earnings, usually called SDE or adjusted EBITDA, is used when the business throws off cash and the buyer is buying that cash. This is the standard for services, agencies, and most operating businesses. Owner earnings means profit after adding back your own above-market compensation and any genuinely personal expenses running through the company, and after subtracting the cost of replacing whatever work you do for free.

That last subtraction is where most founder valuations quietly fall apart. If you are the top salesperson and you pay yourself nothing for it, your profit is borrowed from your own labour, and a buyer will hand it straight back.

These are starting points, not appraisals. I use them to tell a founder within ten minutes whether the number in their head is in the right postcode.

For calibration on the software end, SaaS Capital publishes an index of public SaaS revenue multiples based on current run-rate revenue, and applies a private-company discount to it; Aventis Advisors tracks both public and M&A transaction multiples over time. Both are free and worth reading before you argue with a buyer about a number.

Everyone focuses on growth. Growth matters, but it is the lever you have least control over in the ninety days before a conversation. These three are the ones you can actually change.

Two things, and they pull in opposite directions.

First, buyers now ask how much of your delivery cost is going to fall. If your services business can do the same work with fewer people next year, your future earnings look better and your multiple can improve. Some acquirers are explicitly underwriting that.

Second, buyers ask what stops a competitor from rebuilding your product in a quarter. If the honest answer is nothing but time, the revenue multiple compresses no matter how good this year's growth looks. Defensibility questions used to be about patents and switching costs. Now they are about data, distribution, and workflow depth.

The practical consequence: be ready to answer both. A founder who can say precisely which parts of the business get cheaper and which parts get harder to copy is negotiating from a different position than one who has not thought about it.

When a buyer, a broker or an investor gives you a valuation, three questions tell you what it actually means.

I volunteered as a judge at a pitch competition once and kept asking questions after the other judges had stopped. The company on stage was carrying real debt and pitching the business it had always described itself as. Nobody in the room, including the founders, was valuing the thing that turned out to matter: a piece of technology sitting underneath it, built for internal use, that nobody had ever sold separately.

That technology got spun out. It sells to roughly 50 of the Fortune 500 today and is worth around $150M. The original entity was worth a fraction of that, because the buyer for the original entity was buying the debt and the service contracts, and the buyer for the spin-out was buying a product with no founder attached to it.

I bring it up because founders ask what the company is worth as though the company is one object. Very often it is two, and only one of them is priced the way you hope.

Run the range yourself before anyone runs it for you. Write down your run-rate revenue, your gross retention, your largest customer as a percentage, and an honest count of the decisions that still route through you. That is the whole valuation conversation in four numbers, and you can improve three of them starting Monday.