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SaaS / Software Companies (sub-$10M revenue)

The 3 anchors. Don't leave the meeting without them.

1THE PRICE
2x–4x SDE for sub-$500K ARR (bootstrapped, owner-operated)
Typical deal: $5M
2THE LEVER
Net Revenue Retention
Push this up, multiple goes up
3THE LANDMINE
Monthly churn >3–5%
Surface this in the first 15 min
SDE multiple
2x–4x SDE for sub-$500K ARR (bootstrapped, owner-operated)
EBITDA multiple
Profitable SaaS: 10x–20x EBITDA (high growth); 5x–12x for moderate growth; EBITDA rarely primary metric for growth-stage SaaS
Deal size range
$500K – $30M+
OPEN

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Three things to nail in the first 10 minutes.

  1. 1

    Sub-$1M ARR SaaS: 3.2x ARR. $1M–$5M ARR: 3x–6x ARR (bootstrapped ~4.8x; equity-backed ~5.3x per SaaS Capital 2025).

  2. 2

    Growth rate is the primary multiple driver: under 20% growth = 2x–4x ARR; 40%+ growth = 7x–10x+ ARR.

  3. 3

    Rule of 40 (growth % + EBITDA margin ≥ 40) commands premium multiples — this is the SaaS benchmark.

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