What's My SaaS Company Worth?
ARR multiples, NRR analysis, Rule-of-40 framework, and the metrics that drive strategic premiums.
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SaaS valuations are driven by a tight set of metrics: ARR multiple, net revenue retention, gross churn, and Rule-of-40 score. Bootstrapped, profitable B2B SaaS in the $500K–$10M ARR band is one of the most actively traded asset classes in lower middle market. Below are current multiples and the levers that move pricing materially.
SaaS Company Valuation Multiples (San Diego)
| Metric | Low | Typical | High |
|---|---|---|---|
| ARR Multiple (bootstrapped) | 2.5x | 4.0x | 6.0x |
| ARR Multiple (strategic premium) | 5.0x | 7.0x | 10.0x |
| EBITDA Multiple | 5.0x | 8.0x | 12.0x |
| Rule of 40 Bonus | +0% | +15% | +30% |
Value Drivers Specific to SaaS Company
Net Revenue Retention
NRR > 110%: premium multiple expansion. Below 85%: steep discounts.
Gross Churn
Annual logo churn under 5%: best-in-class. SMB tools at 15%+: lower trades.
Customer Concentration
Top-customer < 20% of revenue: full multiple. Higher: earnout structures.
Founder Dependence
If founder is sales, support, AND product, multiples compress 20–30%.
Frequently Asked Questions
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