How to use this calculator
This calculator helps you estimate the value of your SaaS. It's based on the idea that the valuation depends on two key numbers:
- Annual Recurring Revenue (ARR)
- Growth Rate
The calculation is based on David Cumming's formula as seen on: http://davidcummings.org/2013/08/25/quantifying-the-saas-valuation-growth-rate-multiplier/.
The formula is:
Valuation = 2 x ARR + ARR x (1+ 2.5 x Growth Rate)
In real life valuation is based on a number of other factors, but this formula and calculator gives you some ideas on how you can valuate your SaaS.