Metrics & Performance
Enterprise Value (EV)
A company's total value including equity, debt, and cash — a more comprehensive measure than market capitalization alone.
Enterprise value is calculated as market cap + total debt - cash and equivalents. It represents what it would cost to acquire the entire business. EV is used in valuation ratios like EV/Revenue and EV/EBITDA that are more comparable across companies than price-based ratios.
In Practice
A startup with a $500M post-money valuation, $50M in venture debt, and $80M cash has an enterprise value of $470M ($500M + $50M - $80M).
Why It Matters
Enterprise value provides a more accurate picture of a company's worth than equity value alone, especially for companies with significant debt or large cash reserves.
VC Beast Take
Enterprise value is the sticker price of the whole business. Market cap is what you'd pay for just the equity. The difference matters more than most founders realize.
Related Concepts
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