What is CAC Payback Period and Why Is 12 Months the Golden Standard?
You spent $15,000 on ads this month. Twenty new customers sign up. Success, right? Not quite. The real question is simpler and scarier: how long before those customers actually pay you back? Every dollar you spend acquiring customers sits in limbo until that customer generates enough profit to cover the cost. That waiting period determines […]
What is the Rule of 40 and Why Does This Formula Determine SaaS Valuation?
Here’s something most SaaS founders discover too late: there’s a simple formula that can mean the difference between selling your company for $20 million versus $60 million. What is the Rule of 40, and why does it matter so much to your company’s valuation? Think of it like a credit score for your company. Just […]
How a Strong Valuation Builds a Better Term Sheet for Your Startup
A founder signs a term sheet, proud of landing a $20 million valuation. Six months later, she realizes the deal needs a $100 million exit just to match what she would have earned from a $15 million valuation with cleaner terms. Scenarios like this happen in startup boardrooms every quarter. Founders often chase big headline […]
Rule of 40 vs. Burn Multiple: The SaaS Metric That Actually Moves Valuation in 2025
Here’s what nobody tells you about selling your SaaS company: the spreadsheet you obsess over every Monday morning probably isn’t the one your buyer cares about. You’re tracking MRR as if it were oxygen. Revenue’s climbing. Your board deck looks beautiful. Then you sit down with a serious acquirer and they open Excel, type two […]
ARR vs. EBITDA: The Definitive Guide to Valuing Your SaaS Business in 2025
Picture two software companies sitting across the negotiation table. The first grows revenue by 60% annually but operates at negative EBITDA. The second expands at a modest 20% while generating millions in profit. Which business commands the higher price tag? The answer depends entirely on which valuation lens you apply. The SaaS business valuation landscape […]
Never Say No to a Software Valuation: Smart or Not?
You open your inbox and see it: “We’d love to discuss a software valuation for your business. Are you free this week?” It feels validating and urgent. A software valuation isn’t just a number. It is an anchor that shapes every conversation that follows. In 2025, public cloud and SaaS trade near ~6× median EV/Revenue, […]
Which Banking Valuation Methods Do Bankers Trust for SaaS?
Most SaaS deals start with the same question: which methods do bankers trust for banking valuation? Picture a founder who gets a late note from a strategic buyer asking for a price range before a board prep call the next day. The CFO exports ARR, net revenue retention, and gross margin, then opens the data […]
What to Look For to Hire the Best Valuation Company?
Hiring a valuation company is not just about landing on a price. It’s about securing a number that can face investors without blinking, hold up in financial reporting, withstand buyer and lender questions during diligence, and be persuasive if it ever meets a courtroom. The right valuation turns uncertainty into a decision tool. The wrong […]
Discounted Cash Flow (DCF): Origins, Evolution, and the Best Time to Use It
Any financing or exit begins with one question: “What is this business worth?” Buyers do not pay for promises. They pay for future cash. Discounted cash flow, or DCF, gives a direct answer. It forecasts the cash your company will generate. It then discounts those cash flows back to today at a rate that reflects […]
From Slide Rules to SaaS: A Brief History of Business Valuation (2025 Guide)
The history of business valuation is a story of tools, ideas, and markets evolving together from analog slide rules and rule-of-thumb multiples to spreadsheet-driven DCFs and, today, SaaS-native metrics. Understanding the history of business valuation isn’t trivia; it’s a practical map for choosing the right method in 2025. Pick an approach misaligned with your business […]