Those are single-member LLC revenue numbers. You can get $10M in revenue just by being in a low-margin business. For industries with a 1% margin that's $100k a year in net income, i.e. wages and benefits for one person.

And how are you going to calculate valuation for a closely held private company? In particular, how are you going to calculate it without making them do the thing you don't know if they're required to do without having the calculation already?

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JumpCrisscross 2 days ago | parent | next [-]

> Those are single-member LLC revenue numbers

My thinking was it should be simple to produce. Maybe for revenue only you eliminate the balance sheet and maybe P/L or cap table requirements.

> how are you going to calculate valuation for a closely held private company?

I was thinking headline valuations, but you’re right. Skip valuation.

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cycomanic 2 days ago | parent | prev | next [-]

> Those are single-member LLC revenue numbers. You can get $10M in revenue just by being in a low-margin business. For industries with a 1% margin that's $100k a year in net income, i.e. wages and benefits for one person.

I'm not sure I understand your argument? Wages come out of revenue not income? So the $100k would go to the owners, but as captical gains not wages.

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AnthonyMouse 2 days ago | parent [-]

It's a single-member LLC. The person doing the labor and the person who owns the company are the same person and whether they pay themselves the money as wages or dividends is not really the issue.

A thousand employees is a business on the scale of a mid-sized bank or companies like VeriSign or LendingTree or Iridium Communications. Companies with something like a billion dollars in revenue. $10M in revenue is a small business.

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JumpCrisscross 2 days ago | parent [-]

> It's a single-member LLC

Maybe exempt pass-throughs?

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AnthonyMouse 2 days ago | parent [-]

Why do it for entities of that size at all? It's not about their type of incorporation, it's about not adding more paperwork for small businesses.

You're using or. That means you don't need a low revenue number. You could use $10B because nearly all of the relevant companies would already be in on the basis of the number of employees regardless, so all you need is to catch the few outliers that manage to be major companies without hitting the employee threshold.

	▲	JumpCrisscross 2 days ago \| parent [-]
		> You could use $10B because nearly all of the relevant companies would already be in on the basis of the number of employees regardless Out of curiosity, why $10bn versus $1bn?

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stonemetal12 2 days ago | parent | prev [-]

So? At 10M revenue what are the chances they don't have an accountant who does their taxes and already has all the relevant info? Asking their accountant to crank out one extra form is not going to break the bank.