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“I think there’s something magical about $1 million just in terms of showing the progress and scalability of a business,” said Laura Held, a partner at investment firm Shamrock Capital. She said $1 million in earnings before interest, taxes, depreciation, and amortization is a metric to watch for everyone from angel investors to debt lenders. I am.
Marilyn Adler, founder and managing partner of Mizzen Capital, a group that invests debt in lower-middle market companies that typically generate between $1 million and $10 million in EBITDA, says she states that the minimum amount of EBITDA a company must achieve in order to earn is $1 million. Most will even consider funding. She said that for private equity groups looking to make follow-on acquisitions, this is also usually the minimum requirement to attract any interest. (This is when a buyer acquires a small company to incorporate into an existing business, known as a platform company, to increase profitability or productivity.) For example, the owner of a pharmacy chain may We may acquire a delivery company for this purpose. medicine. “That $1 million in EBITDA seems like a key metric for them to spend time on it and make it really worthwhile,” Adler says.
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