Recruiter's Glossary

Examples: Portfolio Company • Net Debt • Add-on Acquisition

Entry Multiple

Term from Private Equity industry explained for recruiters

Entry Multiple is a financial term used in private equity to describe how much a company was worth when it was first purchased. Think of it like the price tag of a company when an investment firm buys it, usually expressed as a number that shows how many times bigger the purchase price is compared to the company's yearly profits. For example, if a company's yearly profit is $1 million and it was bought for $10 million, the Entry Multiple would be 10x. This helps recruiters understand if a candidate has experience in valuing companies and analyzing purchase prices. Other similar terms include "purchase multiple," "acquisition multiple," or "buyout multiple."

Examples in Resumes

Analyzed Entry Multiple and exit strategies for potential acquisitions valued at $50M+

Developed financial models to determine appropriate Entry Multiples for target companies

Compared Entry Multiple against industry benchmarks to evaluate deal attractiveness

Typical job title: "Private Equity Associates"

Also try searching for:

Investment Associate Private Equity Analyst Investment Banking Associate Investment Professional Deal Associate Financial Analyst M&A Associate

Where to Find Private Equity Associates

Professional Networks

Industry Resources

Example Interview Questions

Senior Level Questions

Q: How do you determine if an Entry Multiple is appropriate for a specific industry?

Expected Answer: A senior professional should explain how they compare multiples across similar companies, consider industry growth rates, market conditions, and company-specific factors to determine if the purchase price is justified.

Q: Describe a situation where you advised against a deal based on the Entry Multiple analysis.

Expected Answer: Should demonstrate ability to evaluate multiples in context of broader market conditions, risk factors, and potential returns, showing judgment in deal evaluation.

Mid Level Questions

Q: What factors influence Entry Multiples in different industries?

Expected Answer: Should discuss how growth rates, market stability, competition, regulations, and economic conditions affect what buyers are willing to pay for companies.

Q: How do you compare Entry Multiples across different markets?

Expected Answer: Should explain how to adjust for market size, geography, economic conditions, and company size when comparing purchase prices.

Junior Level Questions

Q: How do you calculate an Entry Multiple?

Expected Answer: Should explain that it's typically calculated by dividing the total purchase price by the company's yearly earnings (usually EBITDA), showing basic understanding of the concept.

Q: Why are Entry Multiples important in private equity?

Expected Answer: Should demonstrate understanding that Entry Multiples help determine if purchase price is fair and impact potential returns on investment.