How to Value a SaaS Business Before Selling
Getting the valuation right is the difference between a quick deal and a listing that sits for months. Here's how to price your SaaS honestly.
The Revenue Multiple Method
The most common way to value a SaaS is as a multiple of Annual Recurring Revenue (ARR). For small to mid-size SaaS ($1K-$50K MRR), the typical range is 2-5x ARR.
Key Factors That Affect Your Valuation
- → Revenue (40% weight) — MRR and ARR are the baseline. Higher revenue = higher valuation.
- → Growth rate (25% weight) — A SaaS growing 20% YoY is worth significantly more than a flat one.
- → Churn rate (20% weight) — Low churn (<5%) means predictable revenue. High churn kills valuation.
- → Time commitment (10% weight) — Passive SaaS (fewer hours/week) is worth more than time-intensive ones.
- → Tech stack (5% weight) — Modern, well-documented code is easier to hand over.
Valuation for Swaps
If you're swapping on HeySaaS, valuation works differently. Instead of asking "How much cash is this worth?" you ask "How much would I trade for it?"
The key is matching revenue ranges. Aim for a swap within 50% of your current MRR. A SaaS doing $5K MRR is a natural swap partner for one doing $3K-$7K MRR — the value is in the fit, not the exact dollar amount.
List Your SaaS at the Right Price
Once you know your valuation, list your SaaS on HeySaaS. You can set your MRR range and let the market respond. If the price isn't right, you'll know quickly.