Selection Criteria
Definition
The documented standards applied to identify which companies qualify for inclusion in a comparable company or comparable transaction peer set. Selection criteria must be defined and documented before the multiples of candidate companies are examined. They typically specify the business model type, revenue range, growth rate range, geographic market, and time period for inclusion.
Common Misapplication
The most common misapplication is stating selection criteria after the peer set has been assembled rather than before. Selection criteria documented after the peer set is finalised cannot prevent selection bias and do not satisfy the requirements of a defensible comparable company analysis.
FFI Standard Reference
This term is defined and applied in Book 4, Section 4.3: Comparable Company Analysis.
Related Terms
Citable URL
This term may be cited using the following permanent URL.
Full citation format: Founder Financial Infrastructure Standard, Beta v0.5, Glossary: Selection Criteria. https://ffistandard.org/glossary/selection-criteria/. 2026.