Rob Walling

When you sell a SaaS company for, let's say it's around 2 million is where the crossover point is, 2 million and up.

And that used to be lower.

It used to be about a million, but then times change.

Inflation, you know, it's inflation and different economic times.

If you sell for two million and up, you should be, I'll say, thinking in terms of an ARR multiple, even if you're not growing quickly.

Let's say you're flat or just growing 10% a year or something and you're at two million.

I would be looking at a one to two X ARR multiple as a loose rule of thumb.

And there is no other business type that that's really a thing.

It's just so often talked about as an EBITDA multiple.

And if you're at 2 or 3 million, or 5 million, it doesn't really matter, and you've doubled in the last year, let's say you grew 100%, yeah, you're talking 5 to 10x ARR, 4 to 8x, somewhere in that range.

And it can be higher than that.

I've seen a 15x ARR multiple on a business doing several million because it hadn't had any return and it just was an intense bidding war.

It's a marketplace, it's an auction, right?

So when we give these multiples, think of them like a bell curve.

And I can say, well, the smallest one I've ever seen is a 0.5x ARR and the highest one I've ever seen is a 20x ARR and those are

factual statements.

But if you look across 100 sales, the big bell in the middle is probably at 5x or something, you know, and then it goes out from there and gets smaller on each side to the point where, oh, there's only, you know, there's 10 in the middle, and then there's eight and eight on each side, and then there's six and six, and it just kind of slopes down until you have I seen one that's old for point five x and one that's old for 20.

Sure.

That doesn't mean that that's the range.

I'm not going to say it's 0.5x to 20 because that's not helpful for anyone.