EBV is considering an investment in Softco, an early-stage software company. If Softco can execute on its business plan, then EBV estimates it would be five years until a successful exit, when Softco would have about $75M in revenue, a 20 percent operating margin, a tax rate of 40 percent, and approximately $75M in capital. Subsequent to a successful exit, EBV believes that Softco could enjoy seven more years of rapid growth. To make the transaction work, EBV believes that the exit value must be at least $400M.

Softco provides business process integration software and services for corporations across a broad range of enterprise markets. Its main product is the Softco business process integration software platform together with packaged applications and content, where it expects to derive 75 percent of its revenue. In addition, the company expects to earn the remainder of its revenue from mainframe outsourcing and midrange systems management.

Use whatever resources you want to identify at least two comparable companies for Softco and to estimate a relative valuation.