What is your business actually worth?
You'll be asked this question a hundred times: in investor pitches, when considering a buyout, when negotiating with partners, when deciding whether to sell or hold. A vague answer ("I think we're worth $10 million") won't cut it. This calculator gives you a defensible number based on your revenue, profitability, and industry multiples. It's not perfect, but it's based on how real companies are bought and sold.
What This Calculator Does
This tool estimates your company's value using two methods: revenue multiples (common for pre-profitable or growth-stage companies) and EBITDA multiples (common for profitable companies). Feed in your annual revenue, EBITDA (earnings before interest, taxes, depreciation, amortization), and the applicable multiple for your industry. The calculator shows your estimated valuation and explains what the multiples mean.
How to Use This Calculator
Step 1: Identify your annual revenue (trailing twelve months or TTM). If you did $2 million in revenue last year, enter 2000000. Include all recurring and non-recurring revenue, but exclude cost of goods sold.
Step 2: Calculate your EBITDA. This is earnings before interest, taxes, depreciation, and amortization. Take your net income (profit after all expenses) and add back interest, taxes, depreciation, and amortization. If you're not profitable yet, EBITDA might be negative. That's fine; the calculator handles it.
Step 3: Know your industry. SaaS companies trade at 4-10x revenue multiples. Service businesses (agencies, consulting) trade at 2-4x revenue. E-commerce businesses trade at 0.5-2x revenue. Pick the realistic range for your business based on growth rate, profitability, and market position.
Step 4: Enter your revenue multiple and your EBITDA multiple (if applicable). If you're not sure, start with the midpoint: SaaS 7x, service business 3x, e-commerce 1.5x. The calculator will show valuations under both methods. Compare them.
Step 5: The calculator shows your estimated valuation range. This is not a guarantee of what you'll get if you try to sell. It's a data point. A buyer will adjust based on growth rate, market conditions, your competitive moat, and how much they value synergies (cost cuts they can make after acquiring you).
The Formula Behind the Math
Revenue Multiple Valuation
Company Valuation = Annual Revenue × Revenue Multiple
Example: A SaaS company with $3 million annual revenue, valued at 6x revenue:
Valuation = $3,000,000 × 6 = $18,000,000
EBITDA Multiple Valuation
Company Valuation = EBITDA × EBITDA Multiple
Example: A profitable service business with $500K EBITDA, valued at 4x EBITDA:
Valuation = $500,000 × 4 = $2,000,000
Understanding revenue multiples by industry:
Our calculator does all of this instantly-but now you understand exactly what it's computing.
Founders Pitching to Investors
You've built a SaaS company doing $2M ARR growing 30% year-over-year. You're not profitable but you're not bleeding either. Comparable companies in your space trade at 5-7x revenue. You can tell investors: "At current revenue and growth rate, we're worth roughly $10-14 million." This gives them a reference point and shows you understand the market. If they think you're worth $20M, you now have something to debate.
SaaS Companies Planning a Raise
You're doing $1.5M ARR and thinking about a Series A. You model that you'll do $4M ARR in two years. If your market values SaaS at 6x revenue and you achieve $4M, you'll be worth $24M. A Series A that values you at $8M now (making the round $5M at 0.625x forward revenue) might look cheap, but if you hit your growth targets, you'll have returned the fund's capital within two years. This calculator helps you model forward valuations.
Business Owners Evaluating an Acquisition Offer
You got an offer to buy your company for $5M. Your revenue is $2M, EBITDA is $300K. At 2.5x revenue, a $5M offer implies a revenue multiple of 2.5x—which is low for a healthy business. At 3x EBITDA, a $5M offer implies an EBITDA multiple of 16.67x—which is high. This tells you the offer is below market on a revenue basis but above market on a profitability basis. The buyer is betting on margin expansion. Now you can counter with data.
Accountants and CFOs Building Financial Models
You're forecasting the impact of different growth scenarios on company valuation. If you model 40% growth for three years, your revenue goes from $5M to $27M. If multiples stay the same, valuation grows from $35M (7x) to $189M. This calculator is your starting point for showing how growth compounds valuation. Use it to model forward and show investors how you're creating value.
Tips and Things to Watch Out For
Multiples vary wildly by growth rate. A SaaS company growing 100% year-over-year might trade at 10x revenue. A SaaS company with 10% growth might trade at 3x. Growth is the biggest driver of multiples. If your growth is slowing, expect the multiple to compress, which can collapse your valuation even if revenue grows.
Profitable businesses get higher multiples. A profitable SaaS company trading at 8x revenue is worth more than an identical unprofitable one trading at 4x. EBITDA multiples for profitable companies are often higher (and more stable) than revenue multiples. If you're not profitable, focus on the path to profitability, not just revenue growth.
Market conditions matter. The multiples available to you change with market conditions. In 2021, SaaS companies traded at 10-15x revenue. In 2023, they traded at 3-6x. A $100M valuation that seemed reasonable in 2021 is worth $20-40M in a colder market. Multiples can swing 50-70% based on macro conditions alone.
Comparables matter more than formulas. Don't just use an industry average multiple. Find companies similar to yours (same revenue size, growth rate, profitability, market) and see what they trade at. A 5-year-old SaaS company with $10M revenue and 20% growth should be valued differently than a 1-year-old company with $5M revenue and 200% growth.
Revenue quality affects multiples. A SaaS company with 95% net retention (negative churn + expansion) and a 3-year LTV:CAC ratio of 5:1 gets a premium multiple. A SaaS company with 70% net retention and a 2:1 LTV:CAC ratio gets a discount. Your unit economics and retention affect whether you're valued at 5x or 10x revenue.
Don't extrapolate past a few years. You can model your revenue two years out with some confidence. Modeling revenue five years out and claiming a $1 billion valuation based on that is fantasy. Buyers discount future revenue heavily. Focus on near-term revenue and profitability, not far-out projections.
*This valuation calculator provides estimates based on typical market multiples. Actual company value depends on many factors: growth rate, profitability, competitive advantages, market size, customer concentration, and buyer synergies. This calculator is for educational purposes. For a real valuation for financing, M&A, or tax purposes, engage a business valuation professional.*
Frequently Asked Questions
What's the difference between revenue multiple and EBITDA multiple valuation?
Revenue multiples value your company based on total revenue, regardless of profitability. EBITDA multiples value you based on profit. Use revenue multiples if you're pre-profitable or growth-stage. Use EBITDA multiples if you're profitable and want a more conservative valuation. Most mature companies are valued on EBITDA multiples.
What if I'm not profitable? What's my EBITDA?
If you're not profitable, your EBITDA is negative. That's okay-many fast-growing companies are unprofitable. In that case, ignore EBITDA multiples and focus on revenue multiples. As you approach profitability, your EBITDA valuation becomes more relevant and usually higher than revenue-based.
What's a good revenue multiple for my SaaS company?
Depends on growth rate. Fast-growing SaaS (>50% YoY) trades at 8-12x revenue. Moderate growth (20-50%) trades at 5-8x. Slow growth (<20%) trades at 2-5x. If you're doubling year-over-year and profitable, you're in the 10x+ range.
Why do service businesses have lower multiples than SaaS?
Because revenue is not recurring. A service business's revenue depends on continued client relationships and project flow. A SaaS business has predictable, recurring revenue from subscription customers. That predictability justifies higher multiples. If your service business has a retainer model with high renewal rates, multiples go up.
Should I increase my valuation estimate by adding future revenue?
No. This calculator is based on current revenue. Buyers will value you on proven, recurring revenue, not on revenue you haven't earned yet. You can model forward scenarios (if I hit my growth targets, I'll be worth X), but valuations in today's market are based on today's metrics.
What if I get an offer below the valuation this calculator shows?
It means the buyer is being conservative, perhaps due to market conditions, buyer synergies they're not sharing with you, or because they see risks you don't. Counter with data (comps, growth trends) and see if they come up. You can also shop the opportunity to other buyers who might value you higher.
How do I know if my multiple is appropriate?
Find comparable companies. If you're a B2B SaaS company with $3M ARR, 50% growth, and 40% gross margin, look for similar companies that recently raised funding or were acquired. Their valuations tell you the market multiple. Industry reports (Tomás Tunguz's work, Median benchmarks) also share average multiples by growth rate.
Related Calculators
Use the profit margin calculator to understand your EBITDA and net profit, which feed into this valuation model. Check the SaaS metrics calculator to ensure your revenue is healthy and growing. The break-even calculator helps you forecast when you'll become profitable, which increases your valuation multiple.