B2B SaaS businesses targeting enterprise customers that want to be in good shape to raise their Series B during a downturn need to have a run rate of $7-10MM ARR, growing at 2-5X year over year, gross margins 75-85%, and an LTV to CAC ratio of 3-5X. That’s because multiples fell from 100 to 39 times ARR and the target valuation multiples for Series B is ~20X ARR.
Read The Metrics to Raise a Series B (Downturn Edition).
- Many startups that raised at the peak of valuations may struggle to get to these levels and run out of cash
- Revenue multiples in public markets fell from 24x in 2021 to 10x in 2022