EBITDA has been one of the most (mis)used acronyms across startups, founders and investors. Pronounced as EE-BIT-DAA, it became popular during the leveraged buy-out (LBO) era in the 1980s. The advocates of LBO promoted this concept for companies which had already invested heavily in their capital expenditures. With no additional expenditure, EBITDA became a proxy for the ability to service debt, and also a measure of cash flow for those companies.
YOU HAD ME AT EBITDA 💸 💚
YOU HAD ME AT EBITDA 💸 💚
YOU HAD ME AT EBITDA 💸 💚
EBITDA has been one of the most (mis)used acronyms across startups, founders and investors. Pronounced as EE-BIT-DAA, it became popular during the leveraged buy-out (LBO) era in the 1980s. The advocates of LBO promoted this concept for companies which had already invested heavily in their capital expenditures. With no additional expenditure, EBITDA became a proxy for the ability to service debt, and also a measure of cash flow for those companies.