I Valued My Pre-Revenue SaaS Startup (Numbers for First-Time Founders)

After my last video on valuing a pre-revenue physical product startup, many people asked: "How do you value a SaaS startup?" So I'm valuing MY old SaaS startup: TwoSpace. The one that exited for $10M. But we're going back to Day 1. Zero revenue. Zero customers. I'm raising $25K from friends and family. How much equity should I give? Here's the problem: SaaS valuation is COMPLETELY different from physical products. Churn, LTV, CAC, ARR multiples, these metrics don't exist for selling widgets. In this video, I walk through the actual math. Reality Scorecard to see if it's fundable. Unit economics: 68% gross margin, $22 per month net contribution per customer. LTV and CAC calculations which I break down below. 3-year projections going from 100 to 600 customers hitting $234K ARR. SaaS valuation method using ARR multiples not profit multiples. Pre-revenue discount explaining why it's $500K not $1M. And the convertible note structure: $25K at a $500K cap. The result: $500K pre-revenue valuation. If the cap hits, investors get 5% equity. Timestamps: 0:00 Why SaaS valuation is different 2:09 Funding Reality Scorecard 8:10 SaaS Unit Economics 12:00 LTV & CAC calculations 21:30 3 Year Financial Projections 29:10 Valuation Method ARR multiples 32:00 Convertible Note approach WATCH THE PHYSICAL PRODUCT VALUATION VIDEO: Link to the cousin video where I valued a pre-revenue physical product startup:    • I Valued My Cousin's Pre-Revenue Startup i...   + + Some background on me for those interested, here is my much more detailed Startup Journey video. My Failed Startup TwoSpace that hit a $10M valuation before winding up after 6 years of success.    • My $10M Failed Startup Story - Learnings &...   Enjoy the video! + + 👋 Tashi here, I am the Failed Founder of a $10M startup that translated his entrepreneurial skills into a Corporate Career at a Fortune 200 Tech & Property Company. I make videos on startups in a fun way that is easy to understand. LinkedIn:   / tashiddorjee