How Much Is My SaaS Worth? A Practical Valuation Range
Learn how to build a credible valuation range rather than a single number, with practical examples and guardrails.
Trust & methodology
Author: Amanda White
Last updated: 2026-01-12
Last reviewed: 2026-01-12
Methodology: Benchmarks are cross-checked across market reports, transaction comps, and founder-level operating data.
Disclosure: This content is general information, not financial advice.
On this page
- What you'll learn
- Why it matters
- The metric or formula
- Benchmarks & ranges
- Common mistakes
- How to improve it
- Examples
- Checklist
- FAQs
- Summary
- Sources & further reading
- Internal links
- Next steps
- Related resources
- Run the calculator
Jump to the section you need, or keep scrolling for the full playbook.
What you'll learn
You will learn how to build a valuation range that reflects both your current performance and the risks a buyer will price in. We show how to start with a baseline multiple and then adjust it logically.
You will also learn how to separate enterprise value from equity value so you understand the proceeds you might actually receive after debt, cash, and transaction costs.
Finally, we provide a template you can use to update your range quarterly, so your narrative evolves with your metrics.
Quick definition (TL;DR)
SaaS valuation deep dive“How much is my SaaS worth?” is answered by estimating enterprise value based on recurring revenue and adjusting for growth, retention, margin, and risk. It is not a single point; it is a range with a clear rationale.
A good valuation range is narrow enough to be credible, but wide enough to reflect realistic upside and downside scenarios.
Why it matters
A transparent range gives you leverage in negotiations and helps you avoid anchoring mistakes.
Buyers price risk; if you preempt it, you reduce the chance of retrades later.
A quarterly range lets you make go/no-go decisions for fundraising or M&A with clarity.
It keeps internal expectations realistic and prevents morale damage from unrealistic numbers.
The metric or formula
Start with Enterprise Value = ARR × Multiple. Use comps to set a baseline multiple and adjust based on growth, retention, margin, and concentration.
For example: a 5x base multiple, +0.5x for NRR above 110%, -0.5x for a large customer concentration, resulting in a 5x–6x range.
Benchmarks & ranges
For $1M–$3M ARR SaaS with 30% growth and 95% NRR, 3x–5x ARR is common.
For $5M–$10M ARR with 50% growth and 110% NRR, 6x–9x ARR is typical in neutral markets.
Concentration above 25% of ARR often reduces the multiple by at least 0.5x.
Gross margin below 70% usually pulls your multiple toward services benchmarks.
Common mistakes
Using a single multiple without explaining why it fits your growth and retention profile.
Ignoring the difference between enterprise value and equity value.
Overstating the upside without credible operational levers to support it.
Comparing against public company averages without adjusting for scale.
How to improve it
Build a valuation table that shows the effect of each metric on the multiple.
Document risk items and show mitigation plans that can move you into the upper end of the range.
Track NRR and gross margin monthly to avoid surprises in diligence.
Pair the range with an execution roadmap so buyers see why your upside is credible.
Share the range internally so your team aligns on priorities.
Examples
Proof points you can reuse
Bootstrapped SaaS with $2.4M ARR
The company grows 25% YoY, has 98% NRR, and 78% gross margin. Comparable deals point to a 4x ARR baseline. With modest concentration risk and stable churn, the range lands at 3.8x–4.5x, or $9.1M–$10.8M enterprise value.
High-growth SaaS with $7M ARR
Growing 70% YoY with 115% NRR and 82% margin, the team earns a 7x–9x range. They run the calculator monthly and note that if churn drops another point, the upside case could reach 10x.
Checklist (copy/paste)
Gather ARR, growth, churn, NRR, and gross margin for the last four quarters.
Select three recent comparable deals in your ARR band.
Calculate a baseline multiple and list adjustments with reasons.
Translate enterprise value into equity value by subtracting debt and fees.
Refresh the range quarterly and document what changed.
Use the range to guide fundraising or sale timing decisions.
FAQs
Why is my range wider than what a broker gave me?
Brokers often provide a narrow range to anchor expectations. Your internal range should include downside scenarios so you are not surprised during diligence.
Should I share my valuation range with buyers?
Share the rationale, not just the number. When buyers see your assumptions, they are more likely to negotiate within the range.
How do I account for debt or founder loans?
Debt reduces equity value. Subtract it after estimating enterprise value so you know your expected proceeds.
What if my ARR is lumpy?
Use trailing twelve-month ARR and explain seasonality. Buyers will discount volatility unless you document why it is temporary.
Does a high NRR guarantee a high multiple?
It helps, but buyers still look at growth and margin. NRR is one pillar, not the whole story.
How often do valuation ranges change?
Markets shift each quarter. Update your range with new metrics and stay aware of macro changes that affect multiples.
Summary
Your SaaS is worth a range, not a single number. The range comes from ARR plus a multiple adjusted by growth, retention, margin, and risk factors.
If you can explain each adjustment clearly, you will earn more trust and better outcomes when you go to market.
Sources & further reading
Continue exploring
Next steps to act on this guide
RecommendedTranslate the insights into a valuation narrative by running the calculator, then use the tools and category playbooks to tighten your metrics before you talk to buyers or investors.
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Updated 2026-01-12Plug your ARR, growth, retention, and margin into the calculator to see how these playbooks translate into value. No login required.