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M21Case notevaluation and entry multiples

On the Nature of Entry Multiples

Chris Gates, A. J. Wasserstein, Mark Agnew, Brian O'Connor. (2020)

Yale Case, no number printed, October 7, 2020

Argues entry multiple matters less than growth and hold period, using hypothetical scenario tables (for example a "Single" outcome returns 19%, 14% and 10% IRR at 5x, 6x and 7x entry, p5). The cited empirical figures are third-party: "Stanford's 2018 study on search funds found that the median entry multiple for those looking to acquire a business was 6.3x." (p2) and a Capital Dynamics and TU Munich study of 701 private equity exits. Models are unlevered and give both comparison companies a 10x exit.

Source

Full citation

Chris Gates, A. J. Wasserstein, Mark Agnew, Brian O'Connor. (2020). On the Nature of Entry Multiples. Yale Case, no number printed, October 7, 2020.

https://som.yale.edu/sites/default/files/2025-04/On%20the%20Nature%20of%20Entry%20Multiples.pdf

This page describes a work published elsewhere. The summary, where present, states what the authors claim; it is not the school's position. Read the source before quoting a figure.