There is, in fact, such an absurdly high of demand for this business by buyers (see the thread for examples) that I think it is going to bootstrap a supply chain for them.
We're already seeing strong inklings of it in the MicroConf community.
h/t @tylertringashttps://twitter.com/artzandy/status/1196519171393081344 …
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I'm not very literate on the topic, but I've always used 5x to estimate fair (private) market value there, and it tends to track well with actual outcomes.
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There is nowhere near a liquid market for SaaS businesses at 3-5x *revenue* unless the founder already has a strategic acquirer lined up. Awesome when it happens, but not at all market.
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Great to see so many known names in the replies. But reading their different perspectives, my main learning is that the PE market is really opaque.
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*not getting involved in politics* but
@feintl data from 180 closed transactions this year shows highest multiple (nb: terms are not always the same) was 8x revenue, cash. Average SaaS still in 4-5x SDE range. There are some exceptions but market is still similar to past years -
I may be an "idiot" but 9 figures deal value a year, 10 years of history and 50 employees may say otherwise (or happily support that statement :D)
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