Valuation Multiple

A valuation multiple is the number applied to a business's earnings or revenue to estimate its sale price — for example, a 3x SDE multiple or a 4x ARR multiple. The multiple reflects perceived risk and growth: durable, fast-growing businesses with low churn and diversified traffic command higher multiples. For example, $200,000 SDE at a 3.5x multiple implies a $700,000 asking price. Verified metrics tend to support a higher multiple because they reduce a buyer's uncertainty.