The number a buyer multiplies your adjusted EBITDA by to arrive at enterprise value - the standard valuation method for DTC brands above roughly $5M revenue. The multiple is where the negotiation actually happens, and it is a function of leverage as much as performance: growth rate, category, channel diversification and above all competitive tension between bidders. The mistake is anchoring on broker marketing ranges - buyer arbitrage caps what anyone will pay, because an acquirer has to buy you below their own trading multiple for the deal to make sense. A small buyer universe means less tension and a lower multiple, however good the numbers.
Benchmark. Well-run DTC brands at $10M+ revenue trade at 5-12x EBITDA in 2025/2026. Strategic buyers pay the most (10-15x+ at $50M+ scale), PE typically 8-15x. $3M+ EBITDA is the rough floor for serious PE interest; above $5M, competitive processes become likely.