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Suppose I have a Micro SaaS with 100 free users and 10 paid users at $29. How much could this be worth? I saw somewhere that a single sale for $30 exited to $8000. What is the formula for this?
i read somewhere (cant recall the sources, sorry) to be 3 to 5x the ARR
Sorry to give the worst ever consulting answer but…. It depends. :)
Some variables to consider:
Generally speaking, Saas is selling at a multiplier of 2-5x (Multiple = Valuation / ARR). All the stuff I listed above goes into the valuation part of the equation.
From my experience, all of these items need to be on point to ask for a higher end multiplier ie; worth it to a seller, especially at such a low MRR rate.
A buyer doesn’t want to spend more $ reworking all of these things just to get started with making the asset profitable.
Most folks (myself included at times) don’t build to sell, they build to maintain. And therefore most assets that we build need a lot of work/prep to sell.
It’s like buying a house that’s dilapidated to run an airbnb out of…it’s a major sink of funds/time/energy before there’s even a real opportunity to make income.
You also have to consider the difference between a private sale, a listing on a public marketplace to a stranger vs being acquired - all different outcomes that can shape the $$ you’d receive from a sale (and it’s form! Might be lump sum, earn out over time, etc).
So… ending where this started, it depends on what you’ve got going on there!
Thank you for your detailed comment.