Calculate the value of your SaaS

Annual Recurring Revenue : $650,000

$ 0 $10,000,000
How much are you growing per year? : 117%

0 % 500 %

Suggested valuation

$

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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.

Growth Rate

Your growth rate is the rate at which your company increases the ARR on an annual basis. Example:
If your ARR was $100.000 at the end of 2014 and $150.000 at the end of 2015 your growth rate will be 50%.

The formula is:
ARR[-1] : ARR one year ago
ARR[now] : ARR now

Growth Rate = (ARR[now] - ARR[-1])/ARR[-1]

In our example that is:
Growth Rate = ($150.000 - $100.000)/$100.000 = 0.5 = 50%

Annual Recurring Revenue (ARR)

In a typical SaaS a large part of the income is recurring revenue. In your company you might call it Hosting or License. To find your ARR you must take the look at what your clients pay on an annual basis for your recurring services.

Typically you will not include startup fees and project payments into this number.

3 tips to increase your valuation

When you're looking to increase your valuation it's important to ensure the following elements are in place.

Remove risk: The risk for the buyer or investor should be as low as possible

Improve growth: The chance that the business will increase it's growth should be as high as possible

Ensuring both elements can be achieved might be easier than you think.

How to Reduce risk with one simple trick

Ensure investors see a risk-free investment

Start by looking at your company with an investors eyes and ask yourself: "What can go wrong?"

What happens if the founder or key sales rep get's hit by a bus or don't want to work for the new investor?

A key element you can get in hours is a CPQ (Configure, Price, Quote) solution - ensuring sales can continue even without key sales reps.

The best thing is: You can actually setup your own Configure, Price, Quote solution in hours using LeadDoubler.

Learn more: www.leaddoubler.com/quotegenerator

Increase growth with your own calculator

Simple tricks might be worth a fortune

We know - you might be working 24/7 to get the leads needed to make the sales you have to.

With a Lead Generating Quiz, Calculator or Quote Generator you might be able to get those leads with a much smaller effort.

This has proven to be a massive growth lever for companies of all sizes.

Not only does it increase direct leads from your own website - but it also increases the number of leads your external partners are able to generate.

Learn more on how you can get leads with an interactive online calculator.

About this calculator

Built in minutes - generating leads for years

This page and the calculator - is created using the LeadDoubler platform.

It was created simply by uploading a spreadsheet and selecting input and output cells.

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