Many of you have asked us how to value your startup. We understand the anxiety around valuations: Overvalue, and you’ll struggle to attract acquisition offers; undervalue, and you could leave money on the table. For the past few months, we’ve drawn upon our market expertise to build a solution that makes valuing your startup and understanding its performance super easy.
Today, I’m delighted to announce the launch of MicroMRR, a SaaS valuation calculator and analytics platform that combines data from 100s of closed acquisitions on Acquire.com to offer a more accurate valuation than ever before.
Similar to the free valuation we provide when you sign up on Acquire.com, MicroMRR compiles real acquisition data with synced Stripe financials to value your startup as the market would.
SaaS valuations involve many variables including expenses, profitability, customer quality, market segment, growth rate, code quality, net promoter score, and more. We plan to build these factors into the MicroMRR calculator over time. As we gather more acquisition data, valuations will become more accurate, which we hope will help your startup get Acquired at the right price.
Today, MicroMRR derives your estimated valuation from real-time financials and select data from 100s (and counting!) of closed acquisitions on Acquire. It’s an excellent starting point for acquisition discussions, and best of all, it’s free and easy to use: Just connect your Stripe analytics account and you’re ready to go!
How Does MicroMRR Work?
MicroMRR syncs with your Stripe account and anonymized acquisition data on Acquire. You then receive meaningful, actionable insights into your startup’s valuation and performance. Currently, MicroMRR collects data across six critical metrics:
- New Monthly Recurring Revenue
- Annual Recurring Revenue
- Monthly Recurring Revenue
- Churned Monthly Recurring Revenue
- Upgrades
- Downgrades
MicroMRR compares your financials with those of closed acquisitions on Acquire to give you a valuation that reflects your performance and market sentiment. The more acquisitions close on Acquire, the more accurate MicroMRR becomes.
You can also visualize your data in simple, clear charts which makes it easier to spot trends and project performance. You might even share your MicroMRR account with buyers or advisors.
Can MicroMRR Help Your Startup Get Acquired?
Yes! Valuations are a sore point in many acquisition discussions because you and the buyer have different priorities. But when you value your business based on real-time data, you minimize the cause for disagreement. You might also identify growth strategies that help you get acquired at a better valuation in the future.
Here are some other ways MicroMRR can help you get acquired.
Stay Objective
It’s hard to stay objective when valuing your business. It’s like writing an appraisal for an employee who’s also a close relative: You need to take a cold, critical eye but also don’t want to hurt their feelings, or in the case of a valuation, your ego. Better to let the numbers speak for themselves rather than allow emotion to invalidate your valuation.
Evidence-Based
Once you ground your valuation in data, you know where to open negotiations with buyers. Many startups fail to attract offers because of an inflated asking price. But when you can back up your valuation with numbers and market insight, you not only negotiate from firmer ground, but also demonstrate to buyers that you’ve prepared for acquisition and are ready to play fair.
More Accurate (Than Other Tools)
Our valuation models combine mathematical principles with 100s of closed acquisitions. We don’t just know the market, we are a market. Our M&A, legal, and entrepreneurial teams have helped thousands of acquisitions close. We’re confident you won’t find a better starting point for your valuation, but we also recommend hiring a valuation professional from our advisor directory to zero in on your final number.
Actionable Insights
I’m sure your accountant does a grand job of tracking your financials. MicroMRR does an equally fine job tracking how your revenue impacts your valuation. Few founders have time to reflect on revenue in the context of acquisitions, and those that do, do so too late to take action. Now’s your chance to track and respond to valuation data – for free – long before you exit.
Motivation
MicroMRR is free so you can value your business as often as you like. You might close at a different number (valuations are part science, part art), but the movement of that number indicates whether you’re proceeding in the right direction. As a result, it’s incredibly motivating for you and your teams – especially on a monthly, quarterly, or annual scale.
More Fun!
I’m not being facetious here. Being able to visualize your most critical revenue metrics and how they impact your valuation is a lot more fun than staring at spreadsheets (for most people, anyway). You might spot things you hadn’t noticed before because it’s presented in a different context and format, which you can then use to inform other parts of your business.
How to Get Started
We’ve built MicroMRR to be as simple to use as possible. Just create a free account here: https://micromrr.com Then, synchronize your Stripe account by following the on-screen instructions. Once you’re hooked up, start experimenting with your data and valuation!
We’d love to know what you think of MicroMRR. Please drop us a note at support at Acquire with any questions, comments, or feedback. We’re excited to deliver another time and resource-saving tool to the entrepreneurial community and look forward to developing it with your input. Tell us what you want next!
Please note that MicroMRR valuations are a guide, a solid foundation for acquisition negotiations but not the final say on your valuation. For a thorough assessment of your startup’s valuation, consider hiring a valuation advisor from our M&A Advisor Directory.
