Metrics & Performance
Comparable Company Analysis
A valuation method that estimates a company's value based on the trading multiples of similar public or recently acquired companies.
Comparable company analysis (comps) values a company by applying valuation multiples from similar companies to the target's financial metrics. In venture, comps typically use revenue multiples (EV/Revenue) since most startups are pre-profit. The challenge is finding truly comparable companies, as private startups often have different growth profiles, margins, and risk profiles than public peers.
In Practice
A B2B SaaS startup growing 100% YoY is valued using public SaaS comps trading at 15x forward revenue. Applied to the startup's projected $20M ARR, this suggests a $300M valuation, adjusted downward for illiquidity.
Why It Matters
Comps provide market-based valuation anchors but require careful selection of truly comparable companies. Misapplied comps are a common source of valuation disputes between founders and investors.
Related Concepts
Further Reading
How VCs Evaluate Startups: Inside the Due Diligence Process
Market analysis, founder assessment, reference checks, financial modeling, IC memos—a detailed look at how venture capital firms actually decide which startups to fund.
Building a Venture Capital Track Record From Zero
How emerging fund managers build a credible VC track record from scratch — angel investing strategies, attribution frameworks, and the path from first check to Fund I.
How Startup Valuations Are Actually Calculated
How VCs actually calculate startup valuations at every stage — from pre-seed to Series B+. The six primary methods, real examples, and the negotiation dynamics that determine the final number.
The Complete Guide to Startup Valuation Methods
How do investors decide what your startup is worth? A deep dive into every major valuation method from DCF to comparables to the VC method.
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