Multiply annual recurring revenue by a revenue multiple for a rough valuation.
Overview
Public and private SaaS deals are often discussed as a multiple of ARR, adjusted for growth, margins, and retention.
Enter ARR and a revenue multiple. Valuation ≈ ARR × multiple.
Multiples swing with markets—use recent comps for your growth tier rather than a single headline number.
Steps
Current annual recurring revenue.
Revenue multiple from comps or targets.
Review estimated valuation.
Raise ARR to model next year’s raise.
Test bull, base, and bear multiples.
Math
valuation = ARR × revenueMultiple
A simple market-style estimate multiplies ARR by an agreed revenue multiple.
Worked cases
1.2M×6 = $7.2M
$7.2M valuation.
1.2M×10 = $12M
$12M valuation.
400k×8 = $3.2M
$3.2M valuation.
Why use this
Questions