EBITDA-based | 62 closed LMM transactions | 2017 to 2025
Use last 12 months of actual numbers, not projections. EBITDA should reflect market-rate owner compensation, not what you actually pay yourself.
Total top-line revenue. Include all revenue streams.
Monthly recurring revenue × 12. If you don't have MRR, use your LTM revenue.
Earnings before interest, taxes, depreciation, amortization. Normalize to what a market-rate CEO replacement would cost.
Compare last 12 months to the prior 12 months. This is the single biggest multiple driver.