Assume that Attentive sold a 20% equity stake to the investors.
Then Attentive is valued at €1M / 20% = €5M post-money.
Assume that the investors want to make 10x on their investment.
And that there will be an option pool and 2 follow-up rounds of 20% each.
Then Attentive’s €5M valuation requires a €5M * (10 / (1 - (1 - (1 - 20%) ^ 3))) = €98M exit.
Assume that Attentive trades at 4x revenue per year at exit.
And that there will be no cash and debt.
Then Attentive’s €5M valuation requires €98M / 4 / 12 = €2M revenue per month.
Attentive charges small companies €22 per user per month.
Assume that a customer has 10 users.
Then Attentive’s €5M valuation requires €2M / €22 / 10 = 9,200 customers per month at exit.
Of course a large part of these 9,200 customers will be recurring.
For context: Portugal had 34,000 small companies in 2017.
Originally published at venturevalue.com on February 26, 2019.