The modelled
$20M case.
A modelled illustration: a $20M vertical B2B software group at the 100–249 stage. Companion to Closing the Delivery Discount in B2B SaaS. A model, not a result — every figure is modelled.
Published · Updated
A constructed vertical B2B software group at $20M revenue and 150 people, built from published benchmarks: gross margin near 60%, most revenue maintenance rather than subscription, EBITDA around breakeven. The document runs the operating bridge line by line to 78–82% gross margin, breaks it down by lever, shows the cash shape half-year by half-year, and prices entry and exit on the instruments each actually trades on. Nine sensitivities come before the engagement economics. Every figure is modelled, and every benefit is held to a baseline taken before the change — identified and realised reported as two numbers, never summed.
Key findings
-
Run against the six indicators, the constructed company shows the discount: ARR per head of about $115,000 against a ~$141k median, and product development at ~30% of revenue.
ModelledSaaS Capital, Benchmarkit, SaaSRise benchmarks
-
The financial cleanup takes billed services from 20% of revenue to 14%, and blended gross margin moves only from about 60% to about 63%.
Modelled
-
A third to a half of the product-development line is absorbed customer work: $2–3M of a $6M spend.
Modelled
-
Entry is priced on revenue: at 1.5x, between the ~1.1x IT-services and ~2.3–2.6x non-SaaS software medians, entry enterprise value is about $30M.
ModelledAventis Advisors, private M&A medians
-
Exit is priced on EBITDA: ~$5.5M at 10–11x, about $58M, deliberately below current private medians.
ModelledSEG, Hampleton, Multiples.vc
-
If the engineering baseline is understated by 20%, the largest line in the bridge is mis-sized and EBITDA arrives about a year later.
Modelled
Modelled · central case · $M enterprise value
~1.9x on enterprise value, before fees and structure.
Revenue growth in the bridge sits above the central case as headroom; it is not summed.
- 1
About This Model
Why the discount is easy to assert and hard to picture, and how the model is constructed.
- 2
The Company: Entrenched, Growing, Worth Less Every Year
The entry profile, line by line from published benchmarks, and the six indicators run against it.
- 3
Why the Cleanup Misses
The cleanup succeeds on its own terms and gross margin still stops at 63%.
- 4
The Operating Bridge: 60% to 80% Gross Margin
Every line with its mechanism, the lever decomposition, and the cash shape half-year by half-year.
- 5
Enterprise Value: Entry to Exit
Entry priced on revenue, exit priced on EBITDA, and the sensitivity grid between them.
- 6
Nine Sensitivities to Run First
The ways the case breaks, each read as an outcome, before any base case is believed.
- 7
Illustrative Engagement Economics
The delivery team on the company’s books, the fee as non-recurring cost, carry against the baseline.
- 8
One Starting Move
Run your own numbers into the entry profile, then run the three-pile sort.
Read the full case.
You already have access.
This browser has already been given access to our papers. No need to enter your email again.