What are Revenue Multiples?
Revenue multiples are a valuation metric used to compare companies based on their revenue.
It is calculated as: Company Valuation ÷ Annual Revenue
Example: If a company is valued at $500M and its annual revenue is $100M, the revenue multiple is 5×. This metric is commonly used to compare companies in the same sector.
What is a Cap Table?
A CapTable (Capitalization Table) shows the ownership structure of a company.
It lists shareholders such as founders, investors, ESOP holders, and institutions, along with the percentage of shares owned by each stakeholder.
What is ESOP?
ESOP stands for Employee Stock Ownership Plan.
It is a pool of company shares reserved for employees. These shares are usually granted to employees as part of compensation or incentives.
What is a Funding Round?
A funding round refers to the process where a company raises capital from investors.
Common funding stages include Seed, Series A, Series B, Series C, and later rounds, depending on the maturity of the company.
What is Market Capitalization?
Market capitalization (Market Cap) is the total market value of a company’s outstanding shares.
It is calculated as:
Share Price × Total Number of Shares
This metric is typically used for public companies.
What is Shareholding Percentage?
Shareholding percentage represents the portion of the company owned by a specific investor or stakeholder. It shows how ownership is distributed between founders, investors, ESOP pools, and other shareholders.