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Marrying this analysis with the FE International valuation spectrum for SaaS businesses under a $2m valuation[1] gives some interesting results: - ~6% of these
by runako 4y ago
Marrying this analysis with the FE International valuation spectrum for SaaS businesses under a $2m valuation[1] gives some interesting results:
- ~6% of these founders have built businesses that could likely be sold for > $500k today
- ~4% have built businesses they could likely sell for > $1m
- ~3% have built businesses they could likely sell for > $2m
And for those that want to go bigger, having enough revenue that one could exit for 7 figures makes pitches to investors much stronger. (Some of these companies are doing better financially than VC-backed firms that have raised tons of money. Fast.co, which raised over $100m and produced only $600k in revenue, comes to mind here.)
(I give credence to the FEI valuation spectrum because they were the broker when I sold my last SaaS, and their valuation advice led to a successful sale. I highly recommend them, and will likely use them again in the future.)
Lower-value exits are somewhat harder to value, but I do find it striking that of the analyzed firms, perhaps 10% have built businesses they could sell for $250k or more. (And likely more of the analyzed first simply haven't gotten to that point yet, since this analysis doesn't analyze time-based cohorts. 5-year-old firms are in the same bucket as companies that joined this week.)
1 - https://feinternational.com/blog/saas-metrics-value-saas-business/#valuationspec https://feinternational.com/blog/saas-metrics-value-saas-bus...