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Startup Equity & MRR Valuation Calculator | Founder Tools
Calculate SaaS Monthly Recurring Revenue (MRR), estimate startup valuations, and determine employee stock option pool (ESOP) dilution.
Unit Economics Calculator
Use this free Unit Economics Calculator to run instant, privacy-first client-side calculations.
Retention (NRR) Calculator
Use this free Retention (NRR) Calculator to run instant, privacy-first client-side calculations.
Runway & Cash Calculator
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Freemium Optimizer Calculator
Use this free Freemium Optimizer Calculator to run instant, privacy-first client-side calculations.
SAFE Dilution Calculator
Use this free SAFE Dilution Calculator to run instant, privacy-first client-side calculations.
Stripe Margins Calculator
Use this free Stripe Margins Calculator to run instant, privacy-first client-side calculations.
MRR Upgrades Calculator
Use this free MRR Upgrades Calculator to run instant, privacy-first client-side calculations.
E-Com Unit Auditor Calculator
Use this free E-Com Unit Auditor Calculator to run instant, privacy-first client-side calculations.
Master Your Startup's Unit Economics
Analyze exactly what makes a SaaS business viable. Calculate your LTV to CAC ratio, project your cash runway to determine if you are "Default Alive," and model the compound effect of Net Revenue Retention.
The Holy Grail of SaaS (LTV:CAC)
Customer Lifetime Value to Customer Acquisition Cost (LTV:CAC) is the fundamental formula of SaaS valuation. It dictates exactly how much value you extract from a user relative to what it cost to acquire them.
If your LTV is $1000 and it costs you $500 in marketing to acquire a customer, your ratio is 2:1. In the venture capital world, a ratio of 3:1 is the gold standard. It proves your growth engine is highly efficient and ready for scaling capital.
The Danger Zones
- Below 1:1 (Lethal): You are losing money on every single customer you acquire. Growth will bankrupt you.
- 1:1 to 2:1 (Stagnant): You are barely breaking even. You likely have high churn or inefficient marketing channels.
- Above 5:1 (Missed Opportunity): You are actually too efficient. You should be spending aggressively to acquire more market share before competitors do.
Why NRR is More Important Than Growth
Net Revenue Retention (NRR) measures what happens to your revenue from a cohort of customers over time, excluding new sales. It is calculated by taking your starting MRR, adding expansions (upsells), and subtracting downgrades and churn.
If your NRR is > 100%, you have "Negative Churn." This is the holy grail for B2B SaaS. It means that even if you fired your entire sales and marketing team today, your company's revenue would still grow because your existing customers upgrade faster than they cancel (e.g., Slack, Snowflake, Datadog).
Default Alive vs. Default Dead
Coined by Paul Graham, this framework asks one vital question: Assuming your expenses remain constant and your revenue continues to grow at its current trajectory, do you reach profitability before your cash runway hits zero?
If yes, you are Default Alive. You control your destiny. If no, you are Default Dead. You are completely reliant on securing another round of funding to survive, placing you at the mercy of investors.
The Freemium Trap
Freemium is not a pricing model; it is an acquisition channel. While it significantly lowers CAC by removing friction, it introduces massive server and support costs for users who will never pay you.
Most SaaS companies see a free-to-paid conversion rate of 2% to 5%. If your conversion rate is below 2%, your free tier is likely giving away too much value. If it's above 10%, your free tier is likely too restrictive, acting merely as a free trial rather than a true freemium engine.
Key Startup Terminology
Frequently Asked Questions
Growth & Acquisition
Churn & Retention
Fundraising & Cash
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