Re: And the others?
If you bought a software/SaaS company using a value-to-sales multiple based on the long term development in the company's markets and working backwards using probability-weighted scenarios about the potential size of market and the current market share as well as the level of return of capital you can earn, and you then found that the past growth rates were not real, then that would account for an over evaluation. Software/SaaS sales are massively sensitive in valuations, because they can change the growth rate graphs, with huge impact. It's not the $ amounts that matter, its' the role these $ play in creating the story "we are a fast growing company in a huge market with a small share". The valuation is a multiple of the sales $ over time, and it can be a very very big multiple, because you are using them to justify the value of future growth. Think graphs where one line is pointing up to the top right and one is a flat line. The missing value is that slice of pizza (or pick your favourite food substance) shape.
Biting the hand that feeds IT
