How One-Person SaaS Valuation works

1. Scope

The One-Person SaaS Valuation Calculator estimates the sale price a solo-operated SaaS might fetch in the current micro-acquisition market. It uses revenue multiples (most common for smaller / higher-growth businesses) and profit multiples (more common above $500K ARR and slower-growth) anchored to published data from Acquire.com / MicroAcquire, FE International, and Quiet Light Brokerage. It is an indicative valuation, not a formal appraisal.

2. Inputs and outputs

Inputs: ARR (annual recurring revenue), SDE (owner earnings after expenses), MRR growth rate, monthly churn rate, tech-stack quality (modern/legacy), customer-concentration (top 10 as % of revenue), age of business, owner hours per week, and a sellability score for factors like documentation and SOPs.

Outputs: revenue-multiple value, SDE-multiple value, a blended estimate with a low / mid / high band, and adjustment-factor explanations (what drove the estimate up or down).

Engine source: src/lib/one-person-saas-valuation/engine.ts.

3. Formula / scoring logic

# Base multiples (editorial bands, anchored to published micro-acquisition data)
#   ARR < $500K, <20% MoM growth:   2.5x – 3.5x ARR, or 2.0x – 3.0x SDE
#   ARR $500K – $5M, healthy churn: 3.0x – 5.0x ARR, or 3.0x – 4.5x SDE
#   SaaS with >30% annual growth:   stretches +0.5x – 1.5x

revenue_multiple_adj = base_revenue_multiple
    * growth_modifier        # +15% / +30% / +50% for 20/40/60% MoM ARR growth
    * churn_modifier         # +10% for <3% churn; -15% for >8%
    * concentration_modifier # -20% when top 10 customers > 50% of revenue
    * tech_stack_modifier    # -10% for legacy PHP/jQuery; +5% for modern
    * sellability_modifier   # -15% for no docs/SOPs; +10% for comprehensive

revenue_value = ARR * revenue_multiple_adj
sde_value     = SDE * sde_multiple_adj
blended       = weighted_average(revenue_value, sde_value)
                (weight revenue higher for high-growth SaaS; weight SDE higher for mature)

# Output as low/mid/high band by spreading ±15% around blended

4. Assumptions

• Micro-acquisition population. Base multiples target solo-operated SaaS with < $2M ARR. Larger businesses trade through different broker pools (FE International, Quiet Light above ~$500K; investment banks above ~$5M) with different multiple bands.
• Revenue multiple is most informative for high-growth or low-margin businesses. SDE multiple is more informative for steady-state owner-operator businesses where margin is already extracted.
• Sellability is a real adjustment. A SaaS with documented SOPs, clean code, and low owner time-per-week commands a 15–25% premium over an identical business that requires the founder to operate it.
• Growth multiples are time-sensitive. A 40% YoY grower trades 1.5–2× a 5% grower. Peak-cycle growth premiums (2020–2021) have compressed.
• Customer concentration is punitive. If one customer is > 20% of revenue, most acquirers apply a 20–30% discount.

5. Data sources

• Acquire.com (formerly MicroAcquire) — aggregate micro-SaaS deal data, self-reported multiples. Base reference for < $1M ARR.
• FE International — valuation reports — mid-market SaaS deal multiples (typically $500K–$20M revenue).
• Quiet Light Brokerage — industry reports — SaaS and content-site multiples by size and growth tier.
• Bessemer State of the Cloud 2024 — public-SaaS revenue multiples; useful as a cycle reference but should be heavily discounted (20–40%) for private micro-SaaS.

6. Known limitations

• Multiples are self-reported and biased toward successful closings. Acquire.com aggregate data reflects deals that closed; failed / withdrawn listings are not included.
• Narrow sample size at the extremes. Very-high-growth micro-SaaS (> 100% YoY) and very-old micro-SaaS are both outside the typical marketplace sample; multiples here are more editorial than data-driven.
• Sellability scoring is subjective. Two founders will score their own business differently. Pair the output with a third-party audit if the decision is material.
• Tax consequences of sale are not modelled. Asset vs stock sale, ordinary-income vs capital-gains treatment, and seller-note mechanics all materially change net proceeds. Consult a tax professional.
• Market-cycle sensitivity. A 2021 multiple applied in 2024 could be 1.5–2× too high. The tool's base bands are refreshed periodically; check the as-of date.

7. Reproducibility

8. Change log

• 2026-04-24methodology page first published. Multiple bands anchored to Acquire.com, FE International, and Quiet Light 2024 data.