# Comparable Company Analysis

## Quick Definition

A valuation method that determines company value by comparing financial multiples to similar public or private companies.

## What is Comparable Company Analysis?

Comps valuation determines what a company is worth by examining what similar companies trade for. If comparable SaaS companies trade at 10x revenue, your company might be valued similarly.

## Finding Good Comps

Look for companies with similar: industry/sector, business model, growth rate, profitability profile, and stage. The closer the match, the more relevant the comparison.

## Common Multiples

Revenue multiples (EV/Revenue) for growth companies. EBITDA multiples (EV/EBITDA) for mature businesses. P/E ratios for profitable companies. ARR multiples specific to SaaS.

### Formula

Valuation = Your Metric x Comparable Multiple

#### Example multiples:

- EV/Revenue: 5-15x for SaaS
- EV/EBITDA: 8-15x typical
- EV/ARR: 5-20x depending on growth

#### Example

SaaS company seeking valuation:

- Your ARR: $3,000,000
- Your Growth: 80% YoY

Comparable companies at similar growth trade at 12x ARR.

Implied Valuation = $3M x 12 = $36M

Apply a private company discount of 20-30% if you're not public.

## Related Terms

**Most Favored Nation (MFN)**  
A provision guaranteeing an investor will receive terms at least as favorable as any subsequent investor receives.  
**Qualified Financing**  
The minimum raise amount that triggers automatic conversion of convertible notes or SAFEs.  
**Maturity Date**  
The deadline by which a convertible note must be repaid or converted to equity.