Free Assessment
Is Your SaaS Ready to Sell?
Score your exit readiness across 9 key metrics. Get your estimated multiple range, buyer landscape, and what to optimize — all updating live as you type.
Your Buyer Landscape
At your ARR level, most buyers are entrepreneurs and operators: previous founders, software holding companies, and individuals backed by SBA loans. You'll likely see 3-5x SDE valuations with cleaner deal structures.
●Search funds — MBA grads acquiring a single business to run
●Individual operators — experienced founders looking for cash-flow businesses
●Holding companies — portfolio builders acquiring complementary products
Your Buyer Landscape
At $2M+ ARR, institutional buyers dominate: ~70% PE, ~20% strategic, ~10% individuals. The buyer type determines your valuation method, multiple range, and deal structure.
●Tuck-in PE — bolt your product onto existing portfolio. Fast close, 60-90 days.
●Platform PE — your company becomes the standalone investment. Rollover equity, board oversight.
●Strategic acquirers — buying for synergies. Highest multiples but longest timelines.
Your Likely Deal Structure
PE / Institutional
- 70-80% cash at close
- 10-25% rollover equity
- 5-15% earnout or holdback
- 12-24 month transition
Entrepreneur / SBA
- 80-90% SBA-financed
- 5-10% seller note
- Smaller earnout component
- 30-90 day transition
Optimization Priorities
Watch For These
Methodology: Weighted scoring across 9 key metrics using private market benchmarks from SaaS Capital Index, Aventis Advisors, and Discretion Capital research. Multiple ranges reflect growth + retention archetype mapping with adjustments for business type, market momentum, and platform risk.
Exit Readiness Score
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/ 100
Enter your metrics
Estimated Multiple
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Valuation Range
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Scorecard
ARR Growth
Gross Retention
Net Retention
Rule of 40
Gross Margin
LTV/CAC
Concentration
Revenue Model
Cohort Data
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Enter your metrics to see your exit archetype.
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Frequently Asked Questions
What is the most important metric for SaaS valuation?
Growth rate. Nothing else comes close. 100% YoY growth commands 2-3x the multiple of 20% growth. If you can only optimize one thing, optimize growth.
What is the Rule of 40?
Growth rate + EBITDA margin should be ≥40%. It's the balance check. A 60% growth company at -20% margin = 40. A 20% growth company at 20% margin = 40. Both are healthy. Each 10-point improvement correlates with ~2.2x multiple increase.
What is a good NRR?
>100% is the gold standard—it means you grow without adding new customers. But context matters. SMB: 90-100% is acceptable, 105%+ is excellent. Enterprise: 110-125% expected. Best-in-class public companies: 130%+. Don't compare your SMB product to Snowflake's 158% NRR.
What are current SaaS valuation multiples?
Flat growth: 1.5-2.5x ARR. Growing with 90%+ retention: 3-6x ARR. Elite (Rule of 40 >40%): 7x+ ARR. Smaller SaaS (sub-$2M): 3-5x SDE typically. Remember: higher multiples usually come with complex deal structures.
When should I use SDE instead of ARR?
When ARR is under ~$2M or EBITDA under ~$1M, and especially when talking to financial buyers (individuals, search funds). Normalize owner pay to market rate, add back one-time costs. Strategic buyers at any size may still think in ARR terms.
What's a good gross margin for SaaS?
80%+ is true SaaS. 70-80% is acceptable. Below 70% and you're getting into hybrid territory—buyers will discount your multiple. Below 60% and you're a services business, regardless of how you bill.
How does customer concentration affect valuation?
It's pure risk. If one customer leaving tanks your business, buyers see that. Top 10 customers >50% of ARR? Expect -0.5x to -0.75x discount. Single customer >20%? Major red flag. Target <15% concentration in top 10.
What's the difference between logo and revenue churn?
Logo churn counts customers. Revenue churn counts dollars. If you lose 10 small customers but retain your whales, logo churn looks bad but revenue churn stays healthy. Revenue churn matters more—it's what buyers care about.
How do earnouts affect my actual payout?
Significantly. A 4x multiple with 30% earnout is really 2.8x guaranteed + 1.2x maybe. Discount earnouts 20-50% based on achievability. The higher the headline multiple, the more likely it includes contingencies.
Does platform dependency really matter?
Yes. If Shopify, Salesforce, or any platform can kill your business with an API change or policy update, buyers know it. Critical platform dependency can cost you 1.0-1.5x on your multiple. Diversify your distribution if you can.
Who actually buys B2B SaaS companies?
It depends on your size. Under $2M ARR, most buyers are entrepreneurs—previous founders, software holding companies, and operators looking for an owner-run business. Above $2M ARR, institutional buyers dominate: ~70% PE (tuck-ins, platform builds, value plays), ~20% strategic acquirers, ~10% individuals and search funds.
Do vertical SaaS companies get higher multiples?
At $2M+ ARR, yes. Vertical SaaS commands a premium (~1.10x multiplier) because of higher switching costs and concentrated buyer interest from PE firms building vertical platforms. Below $2M ARR, the buyer pool is similar regardless of positioning.
What's the difference between GRR and NRR?
GRR measures revenue kept from existing customers, excluding expansion. It maxes out at 100% and represents your floor. NRR includes expansion revenue, so it can exceed 100%. High NRR can mask bad GRR. Buyers look at both.
How should I think about rollover equity?
Rollover equity (typically 10-25% of deal value) means you're reinvesting in the business at the buyer's valuation. Discount it 15-30% when comparing offers. PE buyers use it to align incentives.
What's the difference between tuck-in and platform PE acquisitions?
Tuck-in buyers bolt your product onto an existing portfolio company and move fast. Platform buyers make your company a standalone investment. Tuck-ins represent ~50% of PE deals.
How should I structure an earnout to actually get paid?
Avoid binary cliffs. Push for sliding scale or cumulative catch-up structures. Must-haves: information rights, neutral arbitration, and acceleration on termination without cause.
Should I sell stock or assets?
Sellers prefer stock sales for capital gains treatment and QSBS eligibility. Buyers prefer asset sales for step-up in basis. For C-Corps, asset sales create double taxation risk.
How long should I prepare before going to market?
12 months is ideal. Quick wins in 3-6 months, structural improvements in 6-12 months. A 6-week scramble typically leaves 1-2x ARR on the table.
What do buyers look at first during diligence?
Data quality first: clean financials, verified ARR, clear metrics. Then cohorts, operations, team, and narrative. Sloppy data erodes trust and triggers discounts.
Does my market vertical affect my multiple?
Yes. Hot markets (AI, healthcare, security) can add 2-3 turns of premium. Warm markets trade on efficiency. Cold markets see compressed multiples.