The first time a buyer asks "what's your ARR?" most indie founders realise they've never actually answered that question cleanly. You know your Stripe or Paddle dashboard number. You know last month's spike from an annual plan. But what is the business worth — and why would one acquirer offer 2.5× while another hints at 4×?
This guide walks through how micro-SaaS and indie app acquisitions are actually priced, what acquirers look at beyond the headline MRR figure, and how to get a defensible range before you're under LOI pressure.
The formula buyers actually use
For bootstrapped apps under roughly £50k MRR, discounted cash flow models rarely enter the conversation. Acquirers anchor on annual recurring revenue — your MRR multiplied by 12 — and apply a revenue multiple.
A healthy indie SaaS with steady growth typically trades in the 2.5×–4× ARR range. An app doing $10,000 MRR ($120,000 ARR) at 3× implies roughly $360,000. The same MRR at 2× because of high churn or platform risk might only fetch $240,000. That $120,000 gap isn't negotiation theatre — it's how buyers price persistence of revenue after the handover.
Understanding this framing is step one. Step two is knowing what moves you within that band.
TTM revenue vs MRR: don't mix them up
MRR is a point-in-time snapshot: what subscribers are paying this month, normalised to a monthly figure. TTM (trailing twelve months) revenue is what you actually collected over the last year — including annual plans, upgrades, one-offs, and refunds.
Acquirers care about both, for different reasons:
- MRR tells them what the engine is producing right now and drives the multiple calculation.
- TTM revenue tells them whether the current MRR is trustworthy — or inflated by a one-time annual bump, a launch spike, or revenue that already churned out.
If your MRR chart shows $12k but TTM tells a choppier story, expect diligence questions.
What moves multiples up — and down
The 2.5×–4× range isn't random. It encodes risk. Here's what shifts you toward the top or bottom:
Churn
High churn destroys effective ARR because revenue doesn't persist. An app losing 8% of subscribers monthly is worth materially less than one at 2%, even at identical MRR. Acquirers model lifetime value and payback; churn is often the single biggest multiple killer for indie SaaS.
Growth rate
Flat or declining MRR gets discounted. Consistent month-over-month growth — even 5–10% — signals that the product has room and that you're not propping up numbers with discounts. Double-digit growth with low churn is how you push toward 3.5× or 4×.
Platform diversity
Revenue concentrated on a single marketplace or payment processor is a risk factor. If 90% of MRR flows through one App Store listing or one Paddle product, a policy change or account issue becomes an existential threat. Diversified revenue across Paddle, App Store, and Google Play — or a healthy mix of direct and marketplace sales — reduces perceived risk.
Documentation and data quality
This one surprises founders. Buyers want numbers they can verify quickly — clean MRR history, reconciled refunds, and a coherent acquisition tearsheet. Poor documentation reliably shaves the multiple.
How acquirers think about your app
Put yourself in the buyer's chair for a moment. They're not buying your code repository — they're buying a cash-flow asset with a transfer risk profile. Their mental model looks something like this:
- Is the revenue real and recurring? (MRR trend, churn, refund rate)
- Will it survive without the founder? (documentation, support load, technical debt)
- What could kill it? (platform dependency, single traffic source, key-person risk)
- What's the upside? (growth rate, expansion revenue, under-monetised features)
The founders who negotiate better outcomes aren't the ones who argue hardest on price. They're the ones who walk in with answers already packaged — TTM revenue, valuation range, health indicators, and platform breakdown in one document.
Stress-test your number before a buyer asks
You don't need an investment banker to get a useful range. Start with your current MRR, multiply by 12 for ARR, and apply 2.5×–4× based on honest self-assessment of churn, growth, and platform risk.
Then pressure-test it:
- What happens to your multiple if churn is 2 points higher than you think?
- What if your largest platform account had an issue tomorrow?
- Does your TTM revenue support your current MRR, or tell a different story?
Portco's free SaaS valuation calculator runs this logic with adjustable multiples, so you can see how churn and growth shift your range before you're in a live process. When you're ready to present numbers to a buyer — or just want to know where you stand — the free M&A tearsheet generator packages TTM revenue, valuation band, and health indicators into a PDF export in minutes.
The habit that pays off at exit
Valuation isn't a one-time exercise you do when a buyer appears. It's a quarterly check-in: Is my MRR growing? Is churn stable? Do my numbers reconcile across platforms? Am I documenting revenue sources clearly?
The founders who command top-of-range multiples aren't lucky. They're the ones who treated acquisition readiness as infrastructure — not a last-minute fire drill.
Run your numbers now: portco.io/valuation · portco.io/tearsheet