A plain-English guide to valuation — and how Nabe's $9.99 numbers play out two ways: raising money (VC) vs. selling the company (acquisition).
It's what someone will pay for its future. A profitable corner store and a money-losing startup can be worth the same — because value is about where it's going, not what's in the register today.
There are only two kinds of "someone" who pay:
Venture capitalists give you cash in exchange for a percentage of the company. You keep running it and try to make the whole thing much bigger.
A bigger company (e.g. Compass) buys Nabe outright. You get cash/stock now, and usually stay on in some role.
Both are judged off the same underlying numbers — they just weight them differently. Let's learn the numbers first.
Almost every valuation conversation comes back to these. Learn them and you can follow any pitch meeting.
Your subscription money over a year. At $9.99/mo, every paying account = $119.88/yr of ARR. This is the engine.
A company doubling each year is worth far more per dollar than a flat one. Growth is the single biggest multiplier of value.
The ceiling if everyone paid. Your worldwide ceiling (~$1.9B/yr) is the TAM. It tells investors how big this could get.
The shortcut the whole industry uses: take your yearly recurring revenue and multiply it by a number (the multiple). The faster you're growing and the bigger your market, the higher the multiple.
Pick a revenue scenario (these are the realistic-capture ARR figures from your monetization deck), then drag the multiple.
Illustrative only — real multiples move with growth, margins, and market mood. The "your stake" slider shows why ownership % matters as much as valuation: a smaller slice of a huge pie can beat a big slice of a small one.
Realistic-capture ARR × three multiples. This is the bridge between "we make $X/yr" and "the company is worth $Y."
| Scenario (realistic ARR) | at 5× | at 10× | at 15× |
|---|---|---|---|
| Compass Intl Holdings · $15M | $75M | $150M | $225M |
| US market · $40M | $200M | $400M | $600M |
| Worldwide · $144M | $720M | $1.4B | $2.2B |
Two companies can start at the same revenue. Three years later, the fast-growing one is worth many times more — because growth lifts both the revenue and the multiple. Drag the growth rate and watch.
Pick where you're starting, then set how fast ARR grows per year.
| Time | ARR |
|---|---|
| Today | $5M |
| In 1 year | $10M |
| In 2 years | $20M |
| In 3 years | $40M |
The multiple isn't fixed — it rises with growth. Here: under 50%/yr earns ~5×, ~50–100% earns ~8–12×, and 100%+ ("doubling or better") earns ~15×. That's the double-whammy: fast growth makes the revenue bigger and each dollar of it worth more.
You sell slices of the company to investors for cash, then use that cash to grow faster. You stay CEO. You're betting you can build something huge — because that's the only outcome that makes the dilution worth it.
You do this again at later rounds, each at a higher valuation. Your percentage shrinks, but the pie grows much faster — so your slice is usually worth more each time. Founders commonly end up owning 20–40% by the time of a big exit.
For Nabe: the VC pitch is the overall independent network — ~2M U.S. agents + ~2.5M service providers, scaling worldwide. Compass is left out of the VC story entirely — it's the acquisition narrative, not a customer you'd show investors (an investor would read "our customer is Compass" as concentration risk).
A bigger company buys Nabe outright. You get paid now (cash and/or their stock), it's certain, and you typically stay on — for Nabe, your plan is a small equity stake + an advisor role.
An acquirer often pays more than the revenue-multiple math — because they're not just buying your revenue, they're buying what Nabe does for them:
A mix of: an upfront payment, an earn-out (more money if Nabe hits targets after the deal), retention equity to keep you around, and your advisor role. The exact split is the heart of the negotiation.
| Path A · VC | Path B · Acquisition | |
|---|---|---|
| What happens | Investors buy a slice; you keep building | A company buys all of Nabe |
| Valued mostly on | Future potential, TAM, growth | Strategic value to the buyer + revenue |
| You give up | Ownership %, round by round (dilution) | The company (keep equity + advisor role) |
| You get | Fuel to get much bigger; bigger payout later | Cash/stock now; certainty; instant distribution |
| Risk | High — most startups never hit the big outcome | Low — the money is real and now |
| Control | Stay CEO (answer to a board) | Report into the acquirer |
| Timeline to payout | Years (next round / IPO / later sale) | Now |
| Best Nabe angle | The worldwide ~$1.9B ceiling story | Compass: 340K agents = instant distribution |
Your subscription income over a year. The engine of valuation. At $9.99/mo, one account = ~$120/yr.
The number you multiply ARR by to get valuation. Higher growth → higher multiple (typically 3× slow, 10–20× fast).
What the whole company is judged to be worth — roughly ARR × multiple, or a negotiated strategic price in an acquisition.
Total market (everyone), Serviceable (who you can realistically reach), Obtainable (who you'll actually win). Your ceiling → realistic-capture numbers are exactly this funnel.
Ownership of the company, measured in %. Founders start at 100% and trade slices for cash or talent.
Company value before investment vs. after. Post-money = pre-money + cash invested. Investor's % = cash ÷ post-money.
Your ownership % shrinking as you sell new slices to investors. Fine as long as the pie grows faster than your slice shrinks.
The event where ownership turns into money — an acquisition or an IPO (going public). It's what VCs are waiting for.
Part of an acquisition price paid later, only if the product hits agreed targets after the deal.
Extra an acquirer pays above the revenue formula because the product is uniquely valuable to them (distribution, defense).