Enterprise value
Enterprise value is the headline value of the business, before debt, cash, fees, and structure.
In a sale
Is enterprise value what the seller keeps?
No: debt, fees, working capital adjustments, escrow, deferred and contingent payments, and tax all sit between enterprise value, the headline number in an offer, and the cash that arrives. It is the number founders tend to compare. Two offers with the same enterprise value can leave very different amounts in the founder's account.
Where it comes up
Read it in context
In the articles
- Where founders leave money on the tableMost of what founders lose in a sale is lost in their own decisions, and each one has a fix.
- The 4.5x problemMost founders assume their business is worth the trade multiple. That assumption costs millions.
- Same business, two outcomesTwo identical businesses, one prepared and one not, sell for very different prices.
- What an LOI is really sayingThe headline is one term of nine. Here are the other eight.
- Structure is priceTwo offers with the same headline can differ by millions in what you keep.
See the terms with your own numbers
The Go-To-Market Analysis (GTMA) builds the file a buyer would build on your business, before a buyer does.