SaaS Valuation Calculator
Calculate the fair value of any SaaS company using revenue multiples, Rule of 40, and growth-adjusted metrics. Used by institutional investors.
Growth (40%) + Profitability (10%) = 50
Frequently Asked Questions
What is the Rule of 40?
The Rule of 40 states that a healthy SaaS company's combined growth rate and profit margin should equal or exceed 40%. For example, if your growth is 30%, you need at least 10% profitability.
What is a typical SaaS revenue multiple?
Revenue multiples typically range from 3x to 15x ARR, depending on growth rate and market conditions. High-growth (>40%) companies often command 10x+ multiples.
How is enterprise value calculated?
Enterprise Value = ARR × Revenue Multiple. The multiple is adjusted based on growth rate, net retention, gross margin, and Rule of 40 performance.
What inputs affect valuation the most?
Revenue growth rate has the largest impact on multiples. Net revenue retention (>100% signals expansion) and gross margin (>70% is healthy) are also critical factors.
What is the Rule of 40?
The Rule of 40 states that a healthy SaaS company's combined growth rate and profit margin should equal or exceed 40%. For example, if your growth is 30%, you need at least 10% profitability.
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Estimate the fair value of a SaaS business using institutional-grade valuation metrics.
Step-by-Step Instructions
Enter the company's Annual Recurring Revenue (ARR) and YoY growth rate.
Input Net Revenue Retention (NRR) to capture expansion and churn dynamics.
Set Gross Margin and Free Cash Flow Margin to model profitability adjustments.
Review the implied Enterprise Value, Rule of 40 score, and multiple breakdown.
Use this calculator to estimate the enterprise value of a SaaS company based on ARR, growth rate, net revenue retention, gross margin, and free cash flow margin.
- •Institutional Investors
- •Venture Capitalists
- •Private Equity Analysts
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Real-world case studies showing how advisors use the SaaS Valuation Calculator with clients.