How Much is Your Studio Worth?

Jeff Domke
Aug 10, 2014 · 2 min read

Nobody really knows – and that’s a problem.

How much is your studio worth?

When I ask designers this question, they tend to get defensive.

Why is that?

It’s a valid, albeit private, question to ask someone who owns a business. Maybe they don’t like the figure, and don’t want to disclose it. Maybe they think I’m trying to prove a point. Maybe they just don’t know.

The reality is, I don’t know. Nobody I talk to knows. Nobody on the Internet seems to know. How much is your studio worth? The details surrounding that question are dark data (i.e., really valuable information that nobody can measure well).

Here are my extremely unscientific, back-of-the-envelope, only-slightly-legitimate conclusions:

How much is your studio worth?

Most founders of design studios don’t know the value (market cap or valuation) of their company. Shame on them. That’s bad entrepreneurship, guys and gals.

What is the likelihood of exit/acquisition?

How many designers do I know who have started a studio, and led it to a successful exit/acquisition in the past 12 months?

I personally know: two.

I have heard or read about: maybe 15

Design studios that have started in the past 12 months: I will guess 10,000.

What is the typical exit-market cap, based upon a revenue multiple?

Most design studios that get acquired do so for a multiple around two to four times their annual revenue. How do I know? I don’t; it’s a complete guess.

Is this totally insane?
Yes. Here’s why:

Designers – thousands of us – start this type of company every year, in all countries across the world. Like it or not, design studios are businesses, and businesses are measured by these questions.

If you have started a studio, here’s the situation:

You are currently doing better (or worse) than average. Sorry; nobody really knows what average is.

Discrete odds exist for your success or failure. Sorry; nobody tracks those odds.

If you sell your company, there is a simple formula for guessing your payout. Sorry; nobody knows the right figures to plug in.

You deserve to know the answers. Help me shed some light on the situation by sharing what you know:

First, hit recommend, below.

Then fill out this 30-second survey: http://goo.gl/Z4hmED

Finally, if you think I’m wrong about the points listed above, please comment. Thx.

Design Founders

Designers + Startups. DesignFounders.com

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