That's fair, but you can only reason that way with an owner who is mentally "done" with his business, or his business is flat/ declining. For entrepreneurs that feel they haven't yet attained anything close to the full profit potential of their business, you just have to make them an offer they can't refuse, which leads to absurd valuations. Sometimes works great, sometimes it doesn't, hopefully it evens out positively in the end. That's the game you play when you invest.