This is a complex and often opaque process. There has been a lot written about and discussed. The rule of thumb is that a SaaS that shows definite growth trajectory can expect a 10X revenue x rate of growth x net renewal rate, as post money value, give and take.
David Cummings has written about 5 variables that can possibly provide a more nuanced valuation that is more likely to stick. So you need to include variables like gross margin and market sentiments drawn from Public SaaS companies and their market multiples.
![](https://i0.wp.com/cdn.pitch.link/blog/wp-content/uploads/2020/03/07162744/415.jpeg?resize=800%2C1127&ssl=1)
Read both posts to get a directional indication of what you can expect. I wonder if there are variance to be factored in at various stages of the company (Series A/B etc.) or TAM (potential for growth)?
What is your take?
Where I learnt this #415
5 Variables for a Quick SaaS Valuation
https://davidcummings.org/2020/02/08/5-variables-for-a-quick-saas-valuation/
Premium SaaS Metrics Required for Premium SaaS Valuations
https://davidcummings.org/2020/01/18/premium-saas-metrics-required-for-premium-saas-valuations/