A deck reports €1.5 million in revenue. The financial model calls it ARR. The customer register shows MRR. Before debating valuation, establish whether those figures describe the same business. A scope error at screening can distort the multiple, forecast, and risk assessment that follow.
Start with a definition, not a multiple
Revenue measures activity over a period. ARR expresses an annualized run rate of recurring revenue at a specific date, using a convention that needs to be stated. Invoices, cash receipts, recognized revenue, and contractual commitments are different observations. A newly signed order may not yet be generating revenue; a cash receipt may cover more than one period.
The SEC’s guidance for covered issuers calls for explanations of performance metrics and how they are calculated. It is not a general requirement for private French startups, but it offers a useful analytical discipline: understand how a number is built before interpreting it. SEC, performance metrics guidance, 2020.
Build a bridge from the deck to the customer register
Our approach starts with active customers at the analysis date, then reconciles their amounts against contracts and financial records. Separate subscriptions, variable usage, implementation, and other services. Flag discounts, contracts that have not started, and renewals that remain uncertain. A total that cannot be reconstructed deserves a question before it deserves a valuation multiple.
In the fictional Sillage case, reported MRR is €120,000 as of August 31, 2026. Multiplying by twelve produces a €1.44 million annualized run rate, excluding services. It does not restate 2025 revenue or guarantee twelve months of future cash receipts. Keep the measurement date, scope, and reported status alongside the number. Sillage revenue schedule, pages 1–4, in French.
Understand what could leave the base
Recurring revenue is not certain revenue. For material customers, check renewal dates, notice periods, usage conditions, and signed commitments. Concentration becomes particularly relevant when a large account is approaching renewal. Ask whether the operating team has evidence of continued adoption or simply expects the relationship to continue.
Atlas accounts for 20% of Sillage’s MRR. Losing the entire account would mechanically reduce the base to €96,000 per month before any commercial response. That sensitivity is not a prediction of churn. It makes the exposure visible so the team can examine renewal evidence and the company’s ability to absorb the loss.
Write a conclusion the committee can verify
Avoid “€1.44 million in secured ARR” unless the evidence supports the word “secured.” A stronger statement distinguishes the metric from its risk: “€120,000 in reported MRR at the end of August, annualized to €1.44 million excluding services; the largest customer represents 20% of the base and its renewal remains unconfirmed.”
The committee now has a number, a date, a limitation, and a next step. Add a short list of evidence needed to close the gap: the monthly register, a financial reconciliation, and the largest customer’s contract. Progress should mean resolving uncertainty, not merely adding another file to a folder.
Move from measurement to revenue quality
Once scope is clear, examine retention, expansion, and the cost of serving customers. Those dimensions explain the economics of the base; they do not replace its definition. Casian keeps findings and sources together while the investment team decides which assumptions to accept. The Sillage example illustrates this process with fictional documents and saved analysis.