I buy small SaaS companies. Here is how I value yours (real framework)

Nyberg Holdings, two acquisitions (Slipway's predecessor Paperweight among them). The framework I actually use:

Base: 3-4x SDE (seller's discretionary earnings) for profitable micro-SaaS under 1M. Higher for growth, lower for concentration risk. Adjustments: minus 0.5x for founder-key-man risk (if only you can fix it, I pay less), minus for churn above 5% monthly, plus for documented processes (runbooks add multiple value, unironically). Deal killers: single-customer concentration over 30%, tech debt that blocks the roadmap, pending legal disputes, and analytics I cannot trust. I walk from bad data, always. Earnouts: I prefer them, founders hate them, the compromise is a short earnout (6 months) on revenue retention, not growth. Retention is provable. Growth is a lottery.

Colm sold me Paperweight and stayed to argue. The arguing was free. The runbooks added 0.5x. Write runbooks.

Can confirm everything, especially the arguing. The runbooks point is real: documenting the boring stuff added real money to the price. Also confirm earnouts are hated. Six months felt fair. Twelve would have felt like employment.

Ex-co-founder, doing fine, confirming: the key-man discount is the one founders underestimate. If the bus factor is one and the bus is you, the buyer prices the bus. Document or discount.

The bus gets priced. Correct. Two buyers walked from deals I reviewed purely on key-man risk. A 20-page ops doc recovered 0.5x multiple. Highest-paid writing in SaaS.

Student founder reading with wide eyes: the "analytics I cannot trust" deal-killer is my takeaway. Clean data from day one is free. Reconstructed data during diligence is expensive. Noted for Notedrop.