In its Starter plan, Portugese startup Attentive sells sales software to small companies for €22 (\$25) per user per month.

They just raised €1M from Indico Capital Partners and others.

### Valuation

Assume that Attentive sold a 20% equity stake to the investors.

Then Attentive is valued at €1M / 20% = €5M post-money.

### Exit

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.

### Revenue

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.

### Customers

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.