ghter definition of 15 times EBITDA, an even tougher definition of 20 times the net income, or even a definition of 20 times the net income minus debt. As can be seen in the table, under these definitions, valuations come down from the stratosphere quite a bit.38 Finally, Table 1-8 represents the approximate financials of a hypotheti- cal ELEC based on anecdotal information reported in the press towards the end of 2001. We assume for the purpose of this hypothetical profile that ven- ture capitalists invested around $300 million into the company. A majority of ELECs, which at this writing were tied to a single archi- tecture and technology, were relegated by and large to just offering GbE Internet access services rather than having properly deployed a multiar- chitecture, multitechnology, multiservice, multi-QoS, and multimedia appa- ratus. The relevant observation is that, at the time of this writing, traditional ISPs were generally valued by the market at 1.5 times their for- ward annual revenue (refer to Appendix A for support). ELECs that only offer Internet access service over an Ethernet access/Ethernet architecture platform are destined to be valuated at 1.5 times their annual forward rev- enue. If and when these ELECs have properly deployed a multiarchitec- ture, multitechnology, multiservice, multi-QoS, and multimedia apparatus, they can be valuated by the market at 5 to 10 times their forward annual revenue. The issue of company debt is key. Take as an example ELEC A with $1 million in annualized revenue, $0.2 million annually in SGA, $0.2 million annually in operations cost annually, $0.15 million in (amortized) equip- ment costs, and $0.15 million annually in recurring facilities costs. ELEC A's bottom line would be $1 million-$0.7 million=$0.3 million. Deducting Table 1-8 Profile of a Hypothetical, Typical ELEC Cumulative Operations (assumes Valuation Valuation Expenses EBITDA it's carried, Valvation Valuation 20 Times 20 Times Revenue (gross not paid 5 Times 15 Times Net Minus Gross Revenue inclusiv