Most SaaS businesses that fail to sell are not overpriced by a little. They are priced on revenue when the buyer is pricing on risk — and the gap between those two views is where listings sit unsold for months.
The Three Methods, and When Each Applies
Revenue multiple. Annual recurring revenue times a multiple. The default for products with genuine recurring revenue and some history.
Profit multiple. Net annual profit times a multiple, typically lower. More appropriate when infrastructure costs are heavy enough that revenue overstates the business.
Per-user valuation. Paying users times a value per user. A sanity check rather than a primary method, useful when revenue is young but the user base is real.
Use the revenue multiple as your headline and the profit multiple as your reality check. If they disagree sharply, your margins are the problem, and a buyer will find that in the first hour of diligence.
Realistic Multiples
- Growing, low churn, diversified: 3–5× ARR
- Flat and stable: 2–3× ARR
- Declining: 1–2× ARR
Higher multiples exist, but they belong to businesses with meaningful scale, a defensible position, and clean financials — not to a product doing $4,000 a month.
The single biggest determinant is not growth. It is churn, because churn tells the buyer how much of the revenue they are buying still exists in a year.
What Genuinely Raises Your Price
Low churn. Under 5% monthly for small B2B is strong and it compounds into everything else.
Diversified customers. No single customer above 20% of revenue.
Diversified acquisition. Customers arriving from more than one channel. A product dependent entirely on one channel is one algorithm change from zero.
Clean margins. Infrastructure well under 20% of revenue.
Documentation. A buyer who can see how the thing runs is buying a business. One who cannot is buying a mystery, and discounts accordingly.
Independence from you. This is the one sellers underweight most. If revenue depends on your audience, your name, or twenty hours of your week, you are selling a job. Every hour you can remove from the founder's plate before listing raises the multiple.
What Lowers It
High churn. Declining revenue with no explanation. One customer carrying the business. Undocumented code, especially if contractors wrote parts of it without an IP assignment. Heavy infrastructure costs. Any legal or data-protection exposure. And revenue that is really one-off sales presented as recurring.
Preparing to Sell
Clean the financials first. Twelve months of exportable processor data with revenue clearly separated into recurring and one-off. Screenshots will not survive diligence.
Document the operation. Tech stack, deployment, dependencies, monthly costs, and the routine tasks that keep it running.
Reduce your own involvement for a few months before listing, and be able to say how many hours a week it takes.
Fix churn before listing, not after. It is the number the price hinges on, and improving it takes months.
Prepare to explain why you are selling. Every buyer asks. An honest answer — burnout, a new project, needing cash — is fine. An evasive one costs you more than any weakness in the numbers.
Listing It Well
Publish revenue and expenses, so the buyer can see margin. Show the trend honestly, including declines; a buyer who discovers a hidden decline stops trusting everything else. State exactly what transfers: code, domain, users, data, and be explicit that the payment processor will not.
Escrozon holds the buyer's funds while they verify, which changes the seller's incentives for the better. You are not being asked to trust the buyer, so you can afford to be fully transparent — and transparency is what closes these deals. Sellers who disclose weaknesses up front receive fewer enquiries and complete far more of them.
How the Money Works
The escrow fee is paid by the buyer, so your listing price is what lands in your Escrozon wallet. A withdrawal fee applies when you move funds out. Check the current rates on the platform when you price, and set your asking figure on the valuation rather than working backwards from fees you are not paying.
Frequently Asked Questions
How long does a SaaS sale take? One to two weeks for diligence and transfer on a small product, longer where the customer base is large or the migration is complex.
Should I sell before or after fixing churn? After, if you can afford to wait. Churn improvements take months to show in the data, and the data is what sets the price.
Do I need a broker? For small products, generally not — the fee rarely pays for itself. For larger businesses, a broker's buyer network can be worth it.
What if I get no interest at my asking price? That is the market telling you something specific. Ask enquirers what stopped them; the answer is usually churn, concentration, or founder-dependency rather than the headline number.
Can I sell a pre-revenue SaaS? Yes, but you are selling code and users, not a business, and it is valued as such — closer to what it would cost to build than to any multiple.
