Valuation Multiple
Definition
A ratio expressing company value relative to a financial metric, used to compare valuations across companies or to apply a market-derived value benchmark to a subject company's financial metrics. Common valuation multiples for early-stage companies include revenue multiple, ARR multiple, and EBITDA multiple. The selection of the appropriate multiple depends on the company's stage, business model, and profitability.
Common Misapplication
The most common misapplication is applying a multiple derived from one company type to another company type. An ARR multiple from a SaaS business is not directly applicable to a marketplace business, even if both are technology companies with recurring revenue characteristics.
FFI Standard Reference
This term is defined and applied in Book 4, Section 4.3: Comparable Company Analysis.
Related Terms
Citable URL
This term may be cited using the following permanent URL.
Full citation format: Founder Financial Infrastructure Standard, Beta v0.5, Glossary: Valuation Multiple. https://ffistandard.org/glossary/valuation-multiple/. 2026.