Valuation Glossary
Clear definitions of private company valuation terms. From EV/Sales and EV/EBITDA to liquidation preferences, calibration and WACC.
A
Anti-Dilution
How existing investors are protected when a later round prices below the last one.
C
Calibration
Aligning a valuation model to an observed transaction price, then updating it as conditions change.
D
Down Round
A financing round priced below the previous round, which reprices the whole cap table.
E
EV/EBITDA Multiple
Enterprise value over operating earnings; the multiple of choice for mature, profitable companies.
EV/Sales Multiple
Enterprise value over revenue; the multiple used for high-growth, pre-profit companies.
F
Fair Value
The IFRS 13 price at which an asset would change hands between willing, independent parties.
L
Liquidation Preference
The right to be paid back ahead of common shareholders when a company is sold or wound up.
P
Pre-Money vs Post-Money
A company's value before and after new investment, and how the pair sets ownership and dilution.
T
TAM, SAM & SOM
How investors size a market: its total, serviceable and obtainable potential.
Terminal Value
The value of all cash flows beyond the explicit DCF forecast period.
U
Unit Economics
Per-customer profitability: LTV, CAC, CAC payback and the Rule of 40.
W
WACC
The weighted average cost of capital, used as the discount rate in a DCF.
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