Market notes
What a valuation multiple really means
"Three times earnings" sounds like arithmetic. It is a compressed opinion about risk. How to unpack a multiple and tell a cheap business from a merely low-priced one.
The publication
Market notes
Notes on buying, building and backing private companies. For readers who want to understand what sits beneath the headline.
A reading room for market notes
Private company markets are difficult to summarise in a single number. Transactions differ in size, sector, funding and the quality of information available. An asking price is not a completed sale, and a reported multiple may describe a very different business from the one in front of you.
Our market perspective starts with those differences. We look at how earnings, financing and operating conditions shape the questions investors ask. A change in borrowing costs may affect affordability without immediately changing a seller’s expectations. A strong sector narrative may conceal wide variation between individual companies. The useful work is connecting a broad observation to evidence that can actually be checked.
Read these notes as context for your own enquiries, not a timing signal or a promise about where prices will go. The definitions below explain the measures behind market conversations. Where a Dispatch discusses an example, distinguish the illustration from a current opportunity. Specific opportunities belong inside the private community, and every member remains responsible for their own decisions and independent advice.