131–140 of 164 posts
HelloSign is one of the few utility SaaS products I use somewhat regularly that just nails it perfectly (and for free). Please don't screw this up, Dropbox.
I don't mean to ask this ironically; how do these companies come up with these numbers during a sale? Jet.com was sold for $3 Billion, but Craftsman Tools was sold for only $900 Million. I don't really know anything about HelloSign, but can someone tell me roughly why they might have come up with the $230M number?
Esignature is a huge business and the incumbents have a high cost structure or a history of excessive price increases. (Would you want to build your strategy around Adobe?) This gives Dropbox something to anchor against. Both Google and Microsoft improve every quarter, while Dropbox is mostly the same, with the same premium pricetag. I could move my whole company to Dropbox for a couple of million, OneDrive is $0.
We were using this in our app when it suddenly became ridiculously cost prohibitive to do so, so we had to remove it.
This is awesome news, congrats folks!! Have relied on hellosign over the years, including doing all of my home buying paperwork with it.
I've used HelloSign as well, but every other app that I used that Dropbox bought has been discontinued so while I'm happy for the team, I don't have high long term hopes for the project.
Earlier quoted context omitted.
Esignature is a huge business and the incumbents have a high cost structure or a history of excessive price increases. (Would you want to build your strategy around Adobe?) This gives Dropbox something to anchor against. Both Google and Microsoft improve every quarter, while Dropbox is mostly the same, with the same premium pricetag. I could move my whole company to Dropbox for a couple of million, OneDrive is $0.
HelloSign also has a history of excessive price increases. We were using this in our app when it suddenly became ridiculously cost prohibitive to do so, so we had to remove it.
Earlier quoted context omitted.
revenue * multiple let's say $10m in ARR * a 23x multiple The way you get to the multiple is a combination of how fast the revenue is growing, how long you think that will keep up, and the margin of the revenue. Craftsman Tools, for example, was probably not growing much or shrinking and likely had low margin revenue but I don't know.
Revenue is almost meaningless. At least use a multiple of profits or of net income. You know, you can have a crazy revenue, and still lose money, and your company can be bankrupt in a few months.
Revenue * multiple is just a common way of talking about it, especially because companies within the same industry tend to have similar multiples. In reverse if you notice two public (since the information is easy to find)companies with seemingly-similar businesses that have very different multiple, you can start looking into why, and the quarterly financial reports with high-level numbers like cash burn, outstanding debt, profits, or net income would be a great place to start :)
There's something I never understood about e-signature services: how are they legally binding? Why do we need them at all? The end users don't have control over any of the keys, so it all hinges on the e-signature service telling the truth. It's significantly less secure than say, S/MIME with a proper CA-signed certificate. Is the bar for legal "signatures" really that low?
The law isn’t like programming. The reason you sign something is to show clear intent that you intended to agree to something. Nobody’s under the impression a paper signature cannot be forged either. It’s no different. It’s social not mathematical.
I don't mean to ask this ironically; how do these companies come up with these numbers during a sale? Jet.com was sold for $3 Billion, but Craftsman Tools was sold for only $900 Million. I don't really know anything about HelloSign, but can someone tell me roughly why they might have come up with the $230M number?
Earlier quoted context omitted.
HelloSign also has a history of excessive price increases. We were using this in our app when it suddenly became ridiculously cost prohibitive to do so, so we had to remove it.
As a second data point, we looked at HS, too. We alter our templates so often that their inflexible pricing rendered them completely out of the running. Other e-sign solutions were just as bad in that respect. IAAL, and the dirty secret is that “handwritten” scrawls aren’t required to form valid electronic contracts. It’s purely a measure to assuage the social presumption that a thing is locked in when all the partie…
Earlier quoted context omitted.
Revenue is almost meaningless. At least use a multiple of profits or of net income. You know, you can have a crazy revenue, and still lose money, and your company can be bankrupt in a few months.
Those issues end up being reflected in the multiple. Revenue * multiple is just a common way of talking about it, especially because companies within the same industry tend to have similar multiples. In reverse if you notice two public (since the information is easy to find)companies with seemingly-similar businesses that have very different multiple, you can start looking into why, and the quarterly financial report…
This is the common way media talks about it, either because they are (1) uniformed or (2) they only hear of top line revenue.
Companies are typically acquired for EBITDA * Multiple. However when their is a "strategic" acquisition (which this one is) then there is all sorts of weird math that potentially goes on.
Examples: (napkin math)
- Company being acquired has $100M in revenue, and $20M in EBITDA. Post close, they realize $20M in synergies, so they might buy the company at 20x * $40M Adjusted EBIDTA ($20M EBITDA + $20M new EBITDA from synergies)
- Company being acquired has $100M in revenue, and $20M in EBITDA. The acquirer is going to remove 100 engineers post close (100120k/yr = $12M) and therefore the new EBITDA is going to be $32M, and the company gets bought at 20x $32M EBITDA
At the end of the day, the ROI is really what matters.
It's also worth noting - most M&A does not realize the hypothesized deal value. So yes people are right to be critical, but without full details, being precise about what the true value of a company is nigh impossible.