By Ricardo Normand · Published 7 October 2026
Mostly by a multiple of revenue, picked by comparing the company with similar listed companies and recent deals, then checked against other methods. The multiple is a judgment, not a formula. In a real 2026 sale, one banker's methods gave per-share values from $3.51 to $9.51, and the buyer paid $7.40.
- Bankers use several methods at once: comparable listed companies, earlier deals, and a discounted cash flow. The answers can differ widely.
- In the Weave sale, the banker applied revenue multiples below the median of its comparable set (1.8x to 2.3x against a median of 3.1x).
- Check which number is being quoted. Equity value, enterprise value and market capitalization are not the same, and a multiple means different things on each.
- A premium is measured against a share price. Weave's 34% premium was against a price far below where the stock had been.
- For a private company, public data is the starting point, not the answer.
What does "valued at" actually mean?
Founders often hear "software companies sell for six times revenue" or "ten times ARR." Those are summaries of outcomes, not rules. Someone had to choose the multiple, and the choice can be traced in at least one place: the documents a listed company files when it is sold.
When Weave Communications, a listed software company for healthcare practices, agreed to be bought by Francisco Partners in August 2026, its board's financial advisor, Jefferies, described its work in the proxy statement sent to shareholders (Weave, proxy statement, 25 September 2026). It is one of the few places where a banker's valuation is public, with numbers.
Weave is much larger than most readers' companies, and it is listed, so its stock price was a starting point that a private company does not have. I use it because the reasoning is visible, not because the numbers transfer.
What methods did the banker use?
Three, side by side.
Comparable listed companies. Jefferies picked 13 listed software companies it considered similar in some respects, including HubSpot, AppFolio, Klaviyo and Freshworks, and looked at their enterprise value as a multiple of revenue. Median: 3.1x estimated 2026 revenue. It then applied a lower range to Weave: 1.8x to 2.3x. That gave $6.29 to $7.89 a share. The same comparison on estimated 2027 revenue gave $6.32 to $8.21.
Earlier deals. It reviewed eight software and payments acquisitions announced since November 2020, such as Thoma Bravo's purchase of Olo and Permira's of Squarespace. Median: 3.5x trailing twelve-month revenue. It applied 2.0x to 3.0x to Weave, which gave $6.60 to $9.51 a share.
Discounted cash flow. It projected the company's cash flows to 2030, discounted them at rates of 11% to 12%, and added a value for what the business is worth after that. Result: $6.25 to $8.08 a share.
The same set of companies, measured on estimated 2027 adjusted EBITDA instead of revenue (8x to 12x applied), produced $3.51 to $4.90 a share.
The proxy is explicit that none of the comparable companies or deals is directly comparable to Weave, and that the banker used professional judgment in choosing the ranges.
So what did the buyer pay?
$7.40 a share in cash, about $650 million in equity value (Weave, press release, 18 August 2026).
That sits inside four of the five ranges above and well above the fifth, the EBITDA one. In the 2026 revenue range, $7.40 falls a little above the middle. By my arithmetic, interpolating between Jefferies' own endpoints ($6.29 at 1.8x and $7.89 at 2.3x), $7.40 is roughly 2.1x estimated 2026 revenue on an enterprise-value basis. That is my calculation from the filing, not a figure the filing states.
Two things are worth noticing. The banker chose multiples well below the median of its own comparable set. And the ranges disagreed: the lowest value in the proxy is $3.51 a share and the highest is $9.51, a factor of 2.7 by my arithmetic. A valuation is a range with a story behind it.
Equity value, enterprise value: which one is being quoted?
Weave's press release gives an "aggregate equity valuation of approximately $650 million." Jefferies' multiples, in the proxy, are on total enterprise value, which it defines as equity value plus debt and some other claims, less cash.
Those are different numbers, and a revenue multiple built on one is not comparable to one built on the other. The SaaS Capital Index, which publishes the median multiple of 63 listed B2B SaaS companies, uses market capitalization divided by annualized current run-rate revenue, and says it does not adjust for cash or debt (SaaS Capital, SaaS Capital Index, data as of 30 September 2026).
Whenever you hear a multiple, ask three things. Of what: equity or enterprise value? On what revenue: trailing, current run-rate or next year's forecast? And from whose data? A "5x" on one basis can be a "4x" on another.
What does a "34% premium" mean?
The proxy says $7.40 was a premium of about 34 percent to the closing share price on 17 August 2026, the last full trading day before the announcement (same proxy statement).
A premium is measured against a price, and that price has a history. According to the same document, Weave listed in November 2021 at $24.00 a share. It traded at $17.38 in February 2025, around $7.00 in early August 2025, and closed at $5.29 on 7 August 2026. The $7.40 deal price is about 69% below the IPO price. That is my arithmetic from the proxy's figures.
A premium tells you what the buyer paid over the market that day. It doesn't tell you whether the market that day was low, high or fair.
Why did the offers change?
The proxy also records the offers. In August 2025 an unsolicited strategic buyer proposed $9.53 a share, and Weave's board decided not to pursue it. In July 2026 Francisco Partners proposed $9.00. On 10 August 2026 it proposed $7.35, and on 12 August $7.40.
In between, on 4 August, Weave's management told Francisco Partners that it planned to lower its 2026 revenue guidance after weaker sales execution in the second quarter, and on 6 August it reported results and lowered guidance. A second bidder said in July it would need to lower its price after further diligence and tougher debt markets.
The proxy records the order of events. It doesn't say how much each one mattered, so I wouldn't put a number on it. But the sequence makes a point worth remembering: the price in a letter of intent is conditional on what the buyer finds out next.
What does this mean if your company is private?
Three things, and the last is my opinion.
First, public data is where professionals start. SaaS Capital says that public company data is "the best starting point" when valuing a private SaaS business (SaaS Capital Index page), and describes valuing companies as "more art than science" (SaaS Capital, "What's Your SaaS Company Worth?", 2026 update). Its framework uses three things: the current level of public SaaS multiples, your growth rate and your net revenue retention. I covered what SaaS Capital found in How to find potential acquirers for your SaaS company.
Second, expect a range, and expect it to move. The buyer in a real deal will test your numbers, and so will the next one.
Third, know your own numbers before anyone asks: growth, retention, and which revenue figure you mean. I would rather a founder walk into a first conversation knowing that than quoting a multiple they heard on a podcast.
FAIR doesn't value companies. It tracks the buyers and the deal activity around a company, so the deals above are easier to find and compare.
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