SaaS Exit Multiples Are Deflating and Founders Are Adjusting

A r/startups thread from a founder approaching $1M ARR touched a nerve: they were told to expect a 3-4x multiple on exit, while their expectation was 8-10x. The discussion quickly surfaced how much the market has moved. A few years ago a clean SaaS business at that ARR could command 7-10x without much argument. Today, with AI compressing development costs and making it easier to build competing products, buyers are applying heavier discounts.

Separately, a founder with two months of runway got a term sheet at 25% equity for $1M, having asked for 15%. The thread discussion was blunt: with runway that short, you have almost no leverage, and taking the deal is almost certainly better than the alternative. These two threads together reveal a market where both growth-stage and early-stage valuations are under pressure simultaneously.

The counterpoint: one commenter noted that multiples vary enormously based on growth rate, churn, and vertical. A sticky, fast-growing niche SaaS can still command a premium. But the median case has clearly moved down.