Total ROI (return on investment) is the full percentage gain from a company's current valuation to its projected exit value. Annualized ROI is the same gain expressed as a constant yearly rate, the compound annual growth rate (CAGR). The Exit & ROI tab in Equidam shows both as the Total ROI and Annualized ROI cards, next to the Projected exit value they are built from. Use total ROI for the overall gain and annualized ROI to compare returns over different holding periods. Both figures come from your financial projections, so the tab stays empty until your financials are complete.
What is the difference between annualized ROI and total ROI?
Total ROI counts the whole return once. Annualized ROI spreads it over the years to exit, with each year compounding on the last. On the tab:
Total ROI = (projected exit value - current valuation) / current valuation x 100.
Annualized ROI = ((projected exit value / current valuation) ^ (1 / years to exit) - 1) x 100.
Example: a current valuation of 4,000,000, a projected exit value of 16,000,000 and 4 years to exit give a total ROI of 300%. The annualized ROI is 41.4%, because 1.414 multiplied by itself 4 times is about 4.
The current valuation is the weighted average of your valuation methods, shown under the Total ROI card as "from current". Years to exit is the number of forecast years after Year 0 in your financial projections. Both percentages are rounded to 1 decimal.
Why is annualized ROI shown as the headline?
Annualized ROI is the highlighted card because a 300% total ROI over 4 years and one over 8 years are very different returns, and only the annualized figure shows that. Each card has a question-mark icon with a short definition. The meta line under Annualized ROI shows the years to exit.
How is the projected exit value calculated?
The projected exit value is a weighted average of the terminal values of up to 3 financial methods: the VC method, DCF with long-term growth and DCF with multiples. A terminal value is the company's value at the end of your forecast. The How each method contributes section shows each method as a bar, labelled Venture Capital, DCF Long-Term Growth and DCF Exit Multiples, with its value and weight.
VC method: the exit value the VC method already computes for your valuation.
DCF with long-term growth: final-year cash flow to equity x (1 + growth rate) / (discount rate - growth rate).
DCF with multiples: final-year revenue x revenue multiple, or final-year EBITDA (earnings before interest, taxes, depreciation and amortization) x EBITDA multiple.
The weights are your method weights. A method with no terminal value, for example because its inputs are missing or its discount rate is not above the growth rate, is left out, and the remaining weights are rescaled to add up to 100%. A negative terminal value is possible and is still shown. These are values before any survival adjustment: they assume the company survives and meets its projections.
The headline also shows the exit month, the last month of your final forecast year. A price per share appears when every shareholder in your cap table has a share count; it is the exit value divided by total shares.
How do I see what discount rate is being applied?
The discount rate is not shown on the Exit & ROI tab. It is on the Exit Value page of your valuation report, in the Parameters row. For each method that has a terminal value, the row lists the Discount rate, plus the Long-Term Growth Rate for DCF with long-term growth or the Multiple for the VC method and DCF with multiples. The DCF discount rate also appears as WACC (weighted average cost of capital) in Advanced Settings.
What is in "Recent exits in your space"?
When data is available, Recent exits in your space lists acquisitions and IPOs (initial public offerings) reported by Crunchbase. The scatter chart plots exits with a disclosed value, by deal value on a log scale over time. The table below it also lists undisclosed deals, with the value shown as "Undisclosed". The Show chips filter Acquisitions and IPOs in both the chart and the table. You cannot switch both off.
Acquisitions are filtered by your company's industry and country. IPOs are a general feed of recent IPOs, not filtered by industry or country.
Each query returns up to 15 acquisitions and 15 IPOs dated from 2018 onward, newest first.
An acquisition's value is the reported price. An IPO's value is the company's valuation at IPO.
Crunchbase reports values in US dollars. For other currencies, the tab converts every deal at the latest exchange rate, not the rate on the deal date, and says so under the table.
To run the search, we send Crunchbase your industry and country as filters. Your financial figures are not sent. Results are kept for up to 24 hours.
Limits
Plan: the tab needs a paid plan. On the free plan, opening it shows a locked preview with blurred figures and a See pricing button.
Prerequisites: with incomplete financials or questionnaire, the tab shows "Finish your financials to see your exit value" and a Go to Financials button.
When a ROI shows a dash: Total ROI needs a current valuation above 0. Annualized ROI also needs at least 1 forecast year and a positive exit value.
Read-only: you cannot edit the holding period, growth or exit multiple on the tab. Change your financial projections or Advanced Settings and the figures change.
Comparable exits: if comparable exits data is unavailable, the section says so and the rest of the tab still loads. If nothing matches, it suggests widening your filters in the Benchmarks tab.
Language: the tab's text is in English only. The report's Exit Value page follows your report language.
Common questions
Is the projected exit value a prediction of a sale?
No. It is the value your projections imply at the end of the forecast, assuming the company survives and meets them. Change the inputs and the outcome changes.
Why does my annualized ROI look low when total ROI is high?
Annualized ROI spreads the gain across every year to exit, so a longer forecast lowers the yearly rate for the same total.
Why did my ROI change after I added a forecast year?
Adding a year moves the exit date and changes the years to exit, the final-year figures and the terminal values, so both ROI figures change.
Is the exit value also in the PDF report?
Yes. The report includes an Exit Value page when at least one financial method has a terminal value. It shows Total ROI and Annualized ROI when they can be calculated, plus the Parameters row.