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- Aug 5, 2011
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Does anyone here have any experience selling (or buying) a SaaS company? How did you value it?
In my research I've found such crazy ranges of valuation that mix revenue-vs-profit, trailing-vs-projected and multipliers from 3-15x. Depending upon how you do the math a $5m/year company with 10% profit could be valued at just $2m (3x multiplier, trailing 12 months of profit) or it could be as high as $50m (10x multiplier, current annual revenue) depending upon which numbers you use.
I understand every market and condition will vary, but the ranges here seem extreme.
In my research I've found such crazy ranges of valuation that mix revenue-vs-profit, trailing-vs-projected and multipliers from 3-15x. Depending upon how you do the math a $5m/year company with 10% profit could be valued at just $2m (3x multiplier, trailing 12 months of profit) or it could be as high as $50m (10x multiplier, current annual revenue) depending upon which numbers you use.
I understand every market and condition will vary, but the ranges here seem extreme.
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