What valuation multiple do the speakers report receiving for recurring revenue companies?

Name: This is why you need a recurring revenue model
Uploaded: 2024-05-22T05:08:56Z
Channel: Chris Wiser
Description: A brief conversational excerpt arguing that companies should adopt recurring revenue models to achieve predictable revenue and profits, which appeals to…

Chris WiserSerial Entrepreneur and MSP Growth Catalyst

This is why you need a recurring revenue model

22 May 2024

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A brief conversational excerpt arguing that companies should adopt recurring revenue models to achieve predictable revenue and profits, which appeals to investors and supports exits or bringing in a C-suite. The speakers claim that recurring revenue models can command high valuation multiples (one example cited: 25x).

Questions this video answers

25x

If you're ever wanting to exit your company or install a C suite, you need a recurring revenue model because going out and chasing new clients eventually you're going to reach a cap and you're going to reach market saturation over time. But from an investor perspective they want to see recurring revenue. And so we're out there right now talking with multiple groups and we're getting two companies 25x multiples for recurring revenue models. And so wait.
Let'S pause for a second. What X multiple.
Did you just 25x.
Say that again.
25.
I love that. I mean that is glorious.
It is, but it's not a mistake. So we have a very clear model and the way that we were able to do it is first you need recurring revenue because you need to have predictable profits and you need to have predictable revenue because business owners and investors and or installing a C suite, you need that to be able to get yourself out of the day to day.