2 ms·
$25K does seem somewhat pointless when you can wait a month and get that, with no dilution. Their offer was a bit low. However, it's not quite as insulting a
by tarr11 8y ago
$25K does seem somewhat pointless when you can wait a month and get that, with no dilution.
Their offer was a bit low. However, it's not quite as insulting as you may think.
Many bootstrapped SaaS businesses are valued at 3-6x profit (aka "discretionary earnings") [1].
At 3x, your business would be worth $720K, which makes 6% $43,200
At 6x, your business would be worth $1,440,000 which makes 6% equal to $86,400
[1] https://baremetrics.com/academy/how-to-value-a-saas-business https://baremetrics.com/academy/how-to-value-a-saas-business
- true_religion 8y agoThat's a value for selling it to someone else in its entirety, but no one who runs a stable business is going to sell 6% of their company at those rates because it literally means that every share sale will turn a profit guaranteed in 6 months merely from dividends. Imagine what the stock price of a company who boasted such dividends would be.
- a13n 8y agoLots of SaaS companies sell based on a multiple of their ARR, and it can get a lot bigger than 3-6x. https://www.quora.com/What-are-typical-exit-revenue-multiples-for-SaaS-companies-at-sub-5mm-5-10mm-10mm+ https://www.quora.com/What-are-typical-exit-revenue-multiple... Definitely depends on how much you're making, how fast you're growing, who the buyer is, and why they're buying. Sure, if some random person/business is buying you to just consume your existing profits, that's about the worst-case scenario you can find.