Metrics & Performance
Last updated
Quick Answer
A valuation multiple that compares a company's total enterprise value to its annual revenue, commonly used to benchmark SaaS and tech companies.
EV/Revenue Multiple
EV/Revenue = Enterprise Value / Annual Revenue
Where
Enterprise value to revenue (EV/Revenue) is a valuation metric that divides a company's enterprise value (equity value plus debt minus cash) by its annual revenue. In venture capital, this multiple is widely used to value high-growth technology companies, particularly SaaS businesses where profitability is deferred in favor of growth. Higher growth rates, better retention, and stronger unit economics command higher multiples.
In Practice
The Series C was priced at 25x EV/Revenue on $20M ARR, reflecting the company's 150% net revenue retention and 100% year-over-year growth — a premium multiple justified by metrics that suggested the revenue base would triple within 18 months.
What good looks like
Why It Matters
EV/Revenue multiples are the lingua franca of tech company valuation. Understanding what drives multiples higher or lower helps VCs price investments accurately and set realistic expectations for portfolio company valuations.
VC Beast Take
Revenue multiples compressed dramatically from 2021 peaks (when 50-100x was common for high-growth companies) to more sustainable ranges of 10-30x by 2023. Understanding multiple cycles is essential for both entry pricing and exit timing.
Related concepts
How to Calculate and Improve Net Revenue Retention
NRR is the metric VCs care about most. How to calculate it, what good looks like, and proven strategies to push NRR above 120%.
LTV: What Lifetime Value Means in Venture Capital
LTV (Lifetime Value) measures the total revenue a business expects to earn from a single customer over the entire relationship. Here's what it means, how to calculate it correctly, and why the LTV:CAC ratio is the most important unit economics benchmark in SaaS.
Product-Market Fit: What It Really Means and How to Find It
Product-market fit is the single most important milestone for any startup. This complete guide breaks down what PMF actually means, how to measure it, how VCs evaluate it, and what to do once you've found it — with real examples from Slack, Dropbox, Superhuman, and Notion.
Advantages and Disadvantages of an IPO: The Honest Guide for Founders
IPOs unlock liquidity, public capital, and credibility — but they also mean quarterly earnings pressure, loss of privacy, and $5-15M in costs. Here's the honest breakdown, plus when an IPO actually makes sense.
The Biggest VC Deals of Q1 2025 and What They Mean for Founders
Q1 2025 saw $78B deployed globally. AI grabbed 62% of mega-rounds, climate tech got real, and fintech consolidated hard. Here's what the biggest deals tell us about where the money is going.
Top 10 VC Firms Actively Investing in AI in 2025
AI is eating venture capital. Here are the 10 firms deploying the most capital into AI right now, what they're looking for, and how to get on their radar.
The Quarterly Report Template: What LPs Actually Want to See
A practical template for venture fund quarterly reports — with the exact sections, metrics, and format that institutional LPs expect.
How to Write an LP Update That Actually Gets Read
Most LP updates are skimmed or ignored. Here's how to write quarterly updates that LPs actually read, remember, and use to justify re-upping in your next fund.
How to Run an Effective Board Meeting as a Startup CEO
Most CEOs walk into board meetings unprepared and walk out having wasted 3 hours. Here's how to run a board meeting that drives decisions, builds trust, and actually helps your company.
How to Do Due Diligence on a Startup: The VC's Complete Framework
The complete VC due diligence framework: team DD, market DD, product DD, financial DD, legal DD, and customer interviews. With red flags and deal-breakers for each track.
Enterprise value to revenue (EV/Revenue) is a valuation metric that divides a company's enterprise value (equity value plus debt minus cash) by its annual revenue.
Understanding Enterprise Value to Revenue is critical for founders navigating the fundraising process. It directly impacts deal terms, valuation, and the relationship between founders and investors.
Enterprise Value to Revenue falls under the metrics category in venture capital. This area covers concepts related to the quantitative measures used to evaluate fund and company performance.
Newsletter
Fund operations, one problem a week — plus benchmarks from 75,000+ SEC filings. Every Tuesday.
The VC Beast Brief
The weekly brief for emerging managers and founders
Weekly intelligence on fundraising, VC strategy, and the signals that matter. Every Tuesday, free.
Archstone
Run your fund like an institution.