SaaS valuation calculator (SDE multiple)
For founder-led SaaS where buyers price owner cash flow.
Churn rate sensitivity
How monthly churn changes the estimated value.
Method: SDE multiple adjusted for churn, growth, concentration, and owner dependency, kept within 1.5-6x. The range shown is ±20% of the multiple, also kept within 1.5-6x.
What similar businesses actually sold for
Online businesses without inventory, closed January 2024 to October 2026 (114 deals). The headline price includes holdbacks, earnouts and seller financing. The base price leaves them out.
- Headline multiple, median
- 2.9x
- Headline multiple, middle half
- 2.0x–3.6x
- Base multiple, median
- 2.5x
- At or above asking, headline price
- 51%
- At or above asking, base price
- 31%
SaaS, closed January 2021 to October 2026 (60 deals):
- Headline multiple, median
- 3.6x
- Headline multiple, middle half
- 2.7x–4.3x
- Closed all cash
- 43%
Closed deals from an internal source of brokered online business sales. Every figure covers at least 50 deals. Multiples use trailing-twelve-month seller's discretionary earnings (SDE). Asking price is the first list price. Data as of October 5, 2026. Your calculator result reflects your inputs, not these medians.
How to use it
- Enter cash flow. Revenue, net profit, owner comp, and add-backs.
- Add SaaS metrics. Churn, growth, concentration, owner dependency.
- Read the output. SDE, multiple, valuation range, and buyer type.
What is SDE and how it's calculated for SaaS
SDE is the cash flow available to one owner-operator. For SaaS, start with:
- Net income from the P&L
- + Owner's salary and benefits (the largest add-back for most founder-led SaaS)
- + Personal expenses run through the business (travel, meals, home office, phone, etc.)
- + One-time or non-recurring costs (legal fees for a specific matter, one-time development projects, conference sponsorships)
- + Interest, depreciation, and amortization
That SDE is multiplied by the applicable private-market multiple.
Before choosing a multiple, compare SDE, EBITDA, and ARR. The right starting point depends on the owner’s work and the earnings a buyer expects.
SDE vs. EBITDA: When to use which
SDE includes owner compensation. EBITDA does not. That changes the buyer pool.
| Factor | SDE | EBITDA |
|---|---|---|
| Owner comp included? | Yes | No |
| Typical buyer | Individual, search fund | PE firm, strategic acquirer |
| Business size | Under $3-5M ARR | $3M+ ARR |
| Team structure | Owner-dependent | Professional management |
| Typical multiples | 2-5x | 4.5-8x+ |
The purchase price can be similar under either method, but buyer type and deal structure are different.
How to reduce owner dependency before selling
Owner dependency is often the easiest discount to fix. Highest-impact moves:
- Delegate support. Remove founder-as-helpdesk.
- Document processes. Onboarding, billing, releases, support.
- Add dev coverage. Even part-time help lowers technical risk.
- Automate recurring work. Billing, reporting, onboarding, infrastructure.
- Track founder hours. Buyers will ask.
Start 6-12 months before market so the change is visible in diligence.
SaaS SDE valuation FAQ
What is SDE (seller's discretionary earnings)? +
SDE is owner cash flow: net profit plus owner salary, benefits, and valid add-backs.
What is the difference between SDE and EBITDA for SaaS? +
Use SDE for owner-operated SaaS. Use EBITDA when a management team stays post-close.
What SDE multiple do SaaS businesses sell for? +
Most sell around 2.5x-4x SDE, with a median near 3.2x. Exceptional cases reach about 5x. Churn, growth, and owner dependency drive the spread.
How does owner dependency affect SaaS valuation? +
If the owner handles dev, support, and sales, buyers discount for transition risk. Lower founder hours usually means a better multiple.
What churn rate is acceptable for selling a SaaS business? +
Below 3% monthly is acceptable; below 2% is strong. Above 5% usually compresses the multiple.
When should I use SDE vs. ARR multiple for my SaaS? +
Use SDE for founder-led, owner-dependent SaaS. Use ARR multiples for $2M+ ARR with a real team. In between, check both.
Thinking about selling? Compare SaaS selling approaches and discuss representation to decide what comes after the valuation.