The Founder In New Orleans Who Wants To Grow His Saas Company Instead Of Selling It Now

The average valuation for a growing $3M-$5M ARR SaaS business is a 7X multiple of revenues, for the small slice of higher-quality deals I see. Some are higher, some are lower.

So these SaaS companies are already worth $15M-$50M to serious acquirers.

That’s life-changing (or generation-changing) wealth for founders–if they hadn’t raised any outside funding or had raised just a little from investors.

These $3M-$5M ARR businesses have survived the crazy startup phase and are moving solidly into the scaling-up phase.

But this next phase of growth is a massive change in most SaaS businesses.

It’s when founders have to grow from scrappy entrepreneurs into serious SaaS CEOs. Big challenges and new risks.

If you grew your company to $3M ARR and had to make big changes to keep growing, would you do it?

Or would you sell your company and let the acquirer grow it to 50 or 100 or more employees?

There is no right answer to this question.

But founders of up-and-running SaaS businesses think about this question a lot.

They get inquiries every week from potential investors who want to buy their businesses. Or VCs who want to invest.

Like Thomas Brown, CEO, founder, and 100% owner of E-Claim in the New Orleans area.

Thomas and his team have grown E-Claim to almost $5M in recurring revenue with no outside investors. It’s a 20-year-old business that started small and stayed small for a long time.

But they stayed alive with happy customers and overcame new challenges every year.

It wasn’t until the last few years that Thomas realized he wanted to grow it up to the next level, hire more employees, and create new products. To double revenue.

In his mid-50s, Thomas started learning from business coaches, other SaaS founders, and any resource he could find.

He started to believe he could change his thinking and his approach to grow E-Claim to be a much bigger business.

A funny thing happens when you double the X in your 7X multiple.

Or turn your 5X-er into a 10X-er.

There is a MUCH bigger prize if you do it.

As Thomas describes on the Practical Founders podcast this week,

“So you reach a point in the business where you start to think about not what it means for you, but what it means for others. What can you do for your employees and their careers? What other charities can I go and support with this money someday?”

“And then you think about it, and you say, you know, hell, I want to double it, because I could do a lot of good with a lot more money.”

Thomas is a great practical founder who is choosing to grow himself to grow his business and multiply his impact.

Thomas shares some great wisdom on the Practical Founders podcast this week.

Listen to it at practicalfounders dot com or use the link in the comments below.

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