What are the 4 main drivers of company value?

Value is driven by Growth, Profitability, Independence, and Predictability. Enhancing these four drivers increases both your EBITDA and the Multiple applied to it, creating a compound effect on the exit price. ### Technical Explanation Valuation is a dynamic assessment of future risk and reward. Four specific levers drive the Multiple: #### 1. Predictability (Recurring Revenue) Recurring revenue (ARR) increases visibility. Buyers pay premium multiples for high recurring revenue. #### 2. Independence (Key Person Risk) The 'Hit by a Bus' test. Independence reduces the discount rate. Document processes and build a management team. #### 3. Profitability (Margin Stability) High, stable margins indicate a 'Moat'. Buyers prefer consistent 15% margins over volatile ones. #### 4. Growth Rate Growth proves market demand. Justifies a higher exit multiple (PEG Ratio logic). #### The Multiplier Effect Improving these factors works on two levels: increasing the Base (EBITDA) AND the Multiplier. A 20% profit improvement can yield an 80% value improvement due to multiple expansion.