After receiving several questions on how we came up with what we believe our return multiple could be post IPO, we wanted to provide some of the analysis below.
Please keep in mind we are not guaranteeing this, and several factors noted below can impact our return multiples to the negative or the positive. This is a forecast based on the acquisitions we are in discussions with, a secondary offering to acquire those companies and our internal forecasts.
Some factors that can impact this are COVID-19 closures, higher or lower acquisition prices, higher or lower margins, higher or lower revenue multiples at the IPO, or the secondary or end of 2021, and more or fewer acquisitions and the valuation for those acquisitions.
As you can see there are a lot of factors. Our goal was simply to try to (1) illustrate that we plan to grow shareholder value through accretive acquisitions and organic revenue growth from the IPO capital, and (2) we are focused on increasing mid and long-term shareholder value and not on maximizing the IPO share price.
The IPO and Current Reg CF Discount
4.0x Return Analysis*
6.0x Return Analysis*
*Please note that our revenue or revenue multiple could be lower than the illustrations show.
We hope this helps, especially given some of the inquiries we received. Please note, we are only trying to drive returns and shareholder value for our investors and trying to show you how we will drive this growth.
We realize there are ups and downs. The IPO is not an end goal, but rather is the fuel that will drive our future growth. This management team is focused on building a great portfolio of brands that will drive mid and long-term shareholder value.
CEO, Digital Brands Group
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