Valuation multiple is a value, typically expressed as a factor, which is used to multiply a business economic benefit to calculate the value of a business.
If several publicly traded computer hardware companies are valued at approximately two times its revenue, then it is reasonable to assume that a start-up computer hardware company that is growing fast has the potential to achieve a valuation of two times its revenues. Before the start-up issues its IPO, it will likely be valued at less than two times its revenue because of the lack of liquidity of its shares.
A multiple is also an inverse of the capitalization rate. If the cap rate is 20%, then the multiple is 5.0 (100/20% = 5.0).