How Sellable Is Your SaaS?
Score the quality of your revenue the way a buyer reads it, a year or more before you sell. Enter your email to see the score. It is a guide, not a valuation, an appraisal or an offer.
What you get
A score on six dimensions
Recurring share, net retention, customer concentration, cohort stability, growth durability and margin profile, each from 1 to 5, with services revenue scored on its own.
Your two weakest
The two dimensions a buyer will press on first, so you know where the time before a sale is best spent.
What a buyer will ask for
For each weak dimension, the records a buyer will want to see to check the figure for themselves.
Your numbers
Enter what you track, then ask for the score. A figure you leave at 0 is read as not answered, never as a good or a bad answer, and there is no overall score until all six dimensions are answered.
Recognized revenue: what you earned and invoiced, not what is under contract.
Subscription and usage revenue recognized in the same twelve months.
Setup fees, consulting and anything else that does not repeat. Enter 0 if there is none.
Signed contracts, annualized. Shown beside recognized revenue and never added to it. Leave at 0 if you do not track it.
Leave at 0 if you do not track it.
Leave at 0 if you do not track it.
Leave at 0 if you do not know it.
Leave at 0 if you do not track it.
Leave at 0 if you do not track it.
Leave at 0 if you do not know it.
EBITDA or SDE over revenue. Growth and margin both left at 0 are read as not answered.
Set the numbers to match the business. Enter your details below to see the estimate.
See your score
Enter your name and email to see how a buyer will read these numbers.
The bands behind each score
| Dimension | How it is scored | What a buyer will ask for |
|---|---|---|
| Recurring share of revenue | 5 at 90% or more of recognized revenue, 4 from 80%, 3 from 65%, 2 from 50%, 1 below 50%. | A breakdown of recognized revenue by type for the last 24 months from the billing system, with subscription, usage, services and one-time revenue shown separately. |
| Net revenue retention | 5 above 120%, 4 above 110%, 3 from 100%, 2 from 90%, 1 below 90%. | A customer-level schedule of recurring revenue for the last 12 to 24 months (starting amount, expansion, contraction and churn), tied to billing records. |
| Customer concentration | 5 when the largest customer is 10% of revenue or less, 4 up to 20%, 3 up to 35%, 2 up to 50%, 1 above 50%. | Revenue by customer for the last 12 months, with the contracts and renewal dates of the largest customers. |
| Cohort stability (gross revenue retention) | 5 above 95%, 4 above 90%, 3 from 85%, 2 from 75%, 1 below 75%. | Customer and revenue churn by signup cohort, and the list of customers lost in the last 12 months with the reason each left. |
| Growth durability | The lower of two scores. Lifetime value to acquisition cost: 5 above 5x, 4 above 3x, 3 from 2x, 2 from 1x, 1 below 1x. Months to earn back the acquisition cost: 5 under 12, 4 under 18, 3 up to 24, 2 up to 36, 1 beyond 36. | Sales and marketing spend by month with the new customers won, so the acquisition cost, its payback and the lifetime value can be recomputed. |
| Margin profile | The lower of two scores. Gross margin: 5 from 80%, 4 from 75%, 3 from 60%, 2 from 50%, 1 below 50%. Growth plus profit margin: 5 above 40, 4 from 30, 3 from 20, 2 from 0, 1 below 0. | A profit and loss statement with the cost of revenue broken out (hosting, support, payment fees, third-party software) and every owner add-back listed with its support. |
| Services and one-time revenue | Scored on its own and left out of the overall score: 5 at 10% of revenue or less, 4 up to 20%, 3 up to 35%, 2 up to 50%, 1 above 50%. | Services and one-time revenue by customer, whether any of it repeats, and who delivers it. |
Frequently asked questions
Is this a valuation?
No. It scores how a buyer is likely to read the quality of your revenue. It says nothing about price. For an estimated value range, use the valuation calculator.
Where do the bands come from?
They are the rules of thumb of the SaaSClose revenue quality method, version 1, shown in full in the table on this page. They are our own starting points for reading a business, not market statistics.
Why is there no overall score until every dimension is answered?
Leaving out your weakest answer would raise the average. An unanswered dimension is listed as a gap instead, because a buyer will ask for it either way.
Why are net and gross retention shown together?
Net retention counts expansion from the customers who stayed, so it can look healthy while many customers leave. Gross retention shows how much of last year's recurring revenue is still there. A buyer reads both.
Why is services revenue scored separately?
A buyer weighs recurring revenue and services revenue differently, and mixing them hides both. Services and one-time revenue gets its own score and is left out of the overall score.
What is the difference between contracted and recognized revenue?
Recognized revenue is what you earned and invoiced over the last twelve months. Contracted revenue is what customers have signed for, annualized. The score uses recognized revenue and shows contracted revenue beside it.
Want to talk through the score?
Tell us about the business and we will reply by email.