Spoiler alert: No one measures SaaS metrics the same way.

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Raising a new round is a milestone for any startup—it validates the business, attracts talent, and, most importantly, brings in capital to fuel growth. But there’s an old phrase in venture capital that serves as a cautionary note:

It’s a reminder that not all valuations are created equal—and sometimes, pushing for the biggest number can lead to unexpected pitfalls, especially for founders who resist taking a downround.

Let’s face it: high valuations are seductive. They make headlines, generate FOMO, and serve as a badge of honor in founder circles. But they also create expectations from investors, employees, and the broader market that can be brutal to meet. When the numbers don’t pan out, the fallout can be severe.

Many founders focus on setting the highest valuation (or preserving the previous high), while investors are more focused on de-risking their investment. If investors agree to a lofty valuation, they’ll often introduce more aggressive terms to offset the risk. These “dirty terms” may be buried deep in the term sheet and can end up being far more costly than founders realize.

Here are a few common “dirty terms” that can come into play:

If we put macro conditions to the side for a sec, why are founders like a moth to a flame for the highest valuation possible? Ego plays a role—there’s cachet in being "the unicorn CEO." But there’s also the fear of dilution; founders assume a higher valuation means giving up less equity. On the surface, if you make the number bigger, and give away the same percent of the business, the cash is cheaper.

In reality, the opposite often happens. Yes, a high valuation may mean fewer shares sold upfront, but accepting aggressive terms can outweigh the short-term dilution benefit. You can end up owning more of less when the time comes to settle up.

Ok, back to today’s market. Structured deals are often used to preserve headline valuations from earlier rounds, when capital was cheaper, and expectations were lower. Founders hesitate to take a downround, fearing it will unsettle employees, put previous investors underwater, or send a negative signal to customers. No one wants to go backwards. But pushing for a high valuation at any cost misses the point—raising capital should increase options, not limit them.

TL;DR: Multiples are FLAT week-over-week.

Top 10 Medians:

Revenue multiples are a shortcut to compare valuations across the technology landscape, where companies may not yet be profitable. The most standard timeframe for revenue multiple comparison is on a “Next Twelve Months” (NTM Revenue) basis.

NTM is a generous cut, as it gives a company “credit” for a full “rolling” future year. It also puts all companies on equal footing, regardless of their fiscal year end and quarterly seasonality.

However, not all technology sectors or monetization strategies receive the same “credit” on their forward revenue, which operators should be aware of when they create comp sets for their own companies. That is why I break them out as separate “indexes”.

Reasons may include:

From a macro perspective, multiples trend higher in low interest environments, and vice versa.

Multiples shown are calculated by taking the Enterprise Value / NTM revenue.

Market Cap fluctuates with share price day to day, while Total Debt and Cash are taken from the most recent quarterly financial statements available. That’s why we share this report each week - to keep up with changes in the stock market, and to update for quarterly earnings reports when they drop.

Historically, a 10x NTM Revenue multiple has been viewed as a “premium” valuation reserved for the best of the best companies.

Companies that can do more with less tend to earn higher valuations.

Three of the most common and consistently publicly available metrics to measure efficiency include:

A few other notes on efficiency metrics:

Decreasing your OPEX relative to revenue demonstrates Operating Leverage, and leaves more dollars to drop to the bottom line, as companies strive to achieve +25% profitability at scale.

The most common buckets companies put their operating costs into are:

All of these are taken on a Gaap basis and therefore INCLUDE stock based comp, a non cash expense.