The XIT Methodology

How We Calculate Your Valuation

Three independent institutional methods, blended for your perspective. No black box. No magic numbers. The same techniques PE firms, M&A advisors, and CFOs use — applied to your actual financials.

The Three Methods

FCFF — Intrinsic Value

Free Cash Flow to the Firm discounted by the Weighted Average Cost of Capital (WACC). Five-year explicit forecast plus a Gordon growth terminal value, less an illiquidity discount calibrated for SMBs. This is the institutional standard for what a business is truly worth based on the cash it will generate.

FCFE — Equity Value

Free Cash Flow to Equity discounted by the cost of equity. Tells the owner what their stake is worth after debt service — the right anchor for fundraising, dilution modeling, and partner-buyout conversations.

EV/EBITDA — Market Comps

Trailing and forward EBITDA multiplied by industry-specific transaction multiples. The language brokers, PE firms, and strategic buyers actually speak when they make an offer.

Principles That Run Through Every Calculation

  1. 1

    WACC, not a generic discount rate

    We compute a per-business WACC using your actual capital structure, an industry-calibrated unlevered beta relevered to your debt-to-equity, a credit-spread-driven cost of debt, and your effective tax rate.

  2. 2

    Illiquidity discount, not magical thinking

    Private SMB equity isn't tradeable. We apply a calibrated illiquidity discount to FCFF and FCFE so the answer reflects the price you would actually transact at — not a theoretical public-market value.

  3. 3

    Persona-weighted blend, not a single average

    Sellers, buyers, fundraisers, and investors weight the three methods differently because the relevant question differs. Our blended XIT Valuation reflects the perspective most useful to your decision.

  4. 4

    Living, not static

    Every input is a slider, every method recalculates on change. The answer updates as your business updates — no static PDF that goes stale the day you receive it.

  5. 5

    80/20 over QOE

    We deliver 80% of the answer in 1% of the time and cost of a Quality of Earnings report. When you're ready for a binding QOE, you'll already know your range.

Want to See It on Your Own Numbers?

Spend 10 minutes entering your financials and watch all three methods converge on your value range.

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