Great conversation around this tweet from Eric. One aspect that I think a lot about - exit multiples. We have seen multiple arbitrage make many deals work very well over the last 10 years (buy for 3x, sell for 5x). We all know about the low interest rate environment but the cost of equity also declined materially. In very rough math: A decline in the cost of debt from 10% to 5% and cost of equity from 20% to 15% changes valuation from 10x to 25x EBITDA (5x due to interest, 10x cost of equity). That 25x became the top of the funnel in many roll-ups. It is very important to me to be cautious on up-front valuation and limit your return exposure to the exit multiple.
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