Reading the football field
The football field is the standard way to show a valuation: every method’s range on one axis, with a line at the concluded value. Here is how to read it, and why the line sits where it does.
One chart, every method
There’s no single right way to value a business, so professionals use several and lay them side by side. Each bar is one method’s answer from its low end to its high end. Where the bars overlap, the methods agree. The dashed line is the value the evidence supports.
Each bar is one lens on the same business, all on an equity basis after the bridge, low to high. The solid line is the probability-weighted cash-flow value, which the report uses as its headline.
- Its future cash, in today’s dollarsDiscounted cash flow$3.48M$4.31M
- What similar companies sold for, per dollar of salesPrecedents · EV / revenue$2.80M$4.00M
- …per dollar of profitPrecedents · EV / EBITDA$2.21M$3.60M
- …per customer seatPer-unit precedents$1.77M$4.04M
- The least it’s worth: the customer book alonePorting value, orderly port$1.07M$2.00M
- What a bank will financeSBA 7(a) ceiling$1.88M$2.45M
- What a leveraged sponsor can paySponsor leverage ceiling$2.65M$3.09M
Concluded value: $3.93M
How to read it. Read across: each bar’s left end is its low case, its right end its high case. The dark bar is the method that sets the value; the pale bars are a floor and two financing tests, not prices.
Why the cash-flow method sets the value
It is the only method built from this business’s own forecast. The market methods are prices other companies fetched, scaled to this one; they can’t see that the sample keeps its customers twice as well as average. That’s why the cash-flow value sits above the profit-multiple band: the forecast carries retention forward and a one-year multiple can’t.
Precedent multiples on revenue, on profit and per seat. Disclosed deals are larger than this business, so every multiple is cut by a quarter before it is applied. Without that cut the bars would sit roughly a third higher; the headline wouldn’t move.
What a competitor would pay for the customer book alone in an orderly port, after losing 15% to 25% of the customers who don’t follow: $1.07M to $2.00M. It isn’t what survives a platform failure; that’s the $395k on the gate board.
What a bank-financed buyer can pay while the cash flow covers the debt: $1.88M at 1.50× coverage to $2.45M at 1.15×, the thinnest a lender accepts. And what a sponsor can pay on 2.5× to 3.5× senior leverage: $2.65M to $3.09M. These say how a deal could be paid for, not what the business is worth.
An own-platform provider of the same revenue with every other input at the industry median: $2.09M. The distance from it to the concluded value, +$1.84M, is what the company’s own numbers add.
Each lens, and who prices that way
| Lens, and who prices this way | Low | Mid | High |
|---|---|---|---|
| Discounted cash flow a strategic or adjacent operator that will own the cash flows | $3.48M | $3.93M | $4.31M |
| Precedents · EV / revenue a platform consolidator pricing on revenue | $2.80M | $3.39M | $4.00M |
| Precedents · EV / EBITDA a financial buyer pricing on trailing EBITDA | $2.21M | $2.80M | $3.60M |
| Per-unit precedents · per seat a consolidator pricing per seat | $1.77M | $2.64M | $4.04M |
| Porting value of the book a competitor buying only the customer book | $1.07M | $1.54M | $2.00M |
| SBA 7(a) financeable ceiling an individual limited by what an SBA lender will finance | $1.88M | $2.16M | $2.45M |
| Sponsor leverage ceiling a sponsor sizing senior debt on EBITDA | $2.65M | $2.87M | $3.09M |
The checks on the answer
- Transaction comps. The concluded value sits inside the precedent envelope, $1.77M to $4.04M.
- Floor. The going-concern value sits above the porting floor.
- Composition. Terminal value is 37% of enterprise value; the norm is 35% to 65%.
- Financeability. The value is above what the cash flow can carry at the thinnest bank coverage, $2.45M, so a buyer at this price is a strategic or a seller-financed deal.
How the field is built
- Basis. every lens on an equity basis after the same enterprise-to-equity bridge
- Size adjustment. each precedent multiple × 0.75 because disclosed deals are larger; unadjusted, revenue $3.73M–$5.32M, EBITDA $2.94M–$4.79M, per seat $2.35M–$5.39M
- Revenue lens. 1.05–1.5× net revenue after the size adjustment
- EBITDA lens. 4.13–6.75× normalized EBITDA of $530k after the size adjustment
- Per-seat lens. $224–$516 per seat × 7,800 seats after the size adjustment
- SBA ceiling. 10% equity injection, 10% seller note on standby, 10% over 10 years, debt-service coverage 1.15–1.50× on cash after capital spending and tax
- Headline. the probability-weighted cash-flow value; the market lenses are displayed with equal standing as other buyers’ prices
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