EBITDA for startups
As you grow your startup, you'll likely run into "EBITDA" — or Earnings Before Interest, Taxes, Depreciation and Amortization. While your investors may want you to report EBITDA, you’ll likely first encounter it when you get your first 409A valuation. While the acronym seems deceptively self-explanatory, EBITDA is key to understanding one of the ways investors look at your company.
What exactly is EBITDA?
While not required by the SEC or contained with the Generally Accepted Accounting Principles (GAAP), EBITDA is a metric commonly used by the investment community and other finance providers as a measure of earnings power. Here's an example:
How do I calculate my EBITDA?
It's important to have good accounting to calculate EBITDA accurately. Accounting software like Paperclip makes putting together these necessary figures a cinch. Learn more about using our potent software and helpful accounting associates to see your business from every angle.
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Guest author Phil Debaugh, founder of Tesseract Advisory Group, explores the questions you should be asking when compensating employees from other countries.
How do I define my cost of goods sold (COGS)?
Whether you sell products, software, services or a mixture of the three, cost of goods sold (COGS) or one of its variants is a number you need to know. We tell you how to calculate it and when there are better measurements to use.