How to Sell Your SaaS / Software Business
SaaS businesses command premium valuations due to recurring revenue, high margins, and scalability. Buyers focus heavily on ARR growth, net revenue retention, and churn rates.
EBITDA Multiple
5x – 12x
SDE Multiple
3x – 6x
Typical Revenue
$500K–$20M ARR
Avg. Timeline
6–12 months
What Drives SaaS / Software Valuation
Buyers evaluating saas / software businesses focus on these key factors when determining what multiple to offer:
- Annual Recurring Revenue (ARR) growth rate
- Net revenue retention (NRR) above 110%
- Low monthly churn (under 2%)
- CAC payback period under 18 months
- Scalable architecture and tech stack
- Low customer concentration
Who Buys SaaS / Software Businesses
- Private equity firms
- Strategic acquirers (larger software companies)
- Growth equity funds
- Search fund entrepreneurs
Example: SaaS / Software Valuation
A saas / software business with $500,000 in EBITDA would typically be valued at:
Low estimate (5x)
$2.5M
High estimate (12x)
$6.0M
Use the Business Valuation Calculator with your actual numbers.