German startup just raised from (HTGF). ReTest €600K High-Tech Gründerfonds ReTest sells subscriptions to its software testing tool to DevTesters and managers for per subscription per month (€150 per year). €15 Valuation Assume that ReTest sold a 20% equity stake to HTGF. Then ReTest is valued at €600K / 20% = €3M post-money. How many subscriptions must ReTest invoice each month for its €3M valuation? Exit HTGF labels this investment as a . seed round Assume that HTGF want to make 10x on its winners. And that they need 2x to compensate for dilution. Then HTGF wants to make 10 * 2 = 20x on its investment. And ReTest needs a €3M * 20 = €60M exit value for its €3M valuation. Revenue Assume that ReTest trades at 4x trailing 12 months revenue at exit. And that there is no cash and debt at exit. Then ReTest needs an average of €60M / 4 / 12 = €1.3M in monthly revenue at exit for its €3M valuation. Subscriptions ReTest charges DevTesters and managers €15 per subscription per month. Then ReTest must invoice an average of €1.3M / €15 = 83,333 subscriptions per month at exit for its €3M valuation. DIY Different assumptions? Make a copy of the used for this post (File > Make a Copy…), put in your assumptions and draw your own conclusions. spreadsheet Originally published at venturevalue.com on March 27, 2019.
