Build a one-page valuation model for a mid-market SaaS company we're evaluating, and write a short memo recommending whether we should pursue a term sheet.
XenonDev is a software studio that occasionally acquires smaller tools to fold into our product suite. We're looking at a SaaS company doing roughly $4M ARR with ~70% gross margins and slowing growth. Before we send our corp dev team into a full diligence cycle, we want a tight outside read on whether the numbers justify a term sheet.
Deliverable: a one-page valuation model (Excel or Google Sheets) plus a one-page memo. The model should include a base, upside, and downside case using a DCF and a comparable-company multiple. The memo should land on a recommended enterprise value range and a clear yes/no on whether we open a conversation with the founders.
We'll send you the target's last three years of financials (P&L and a basic cohort retention table), a list of five comparable public SaaS companies, and our internal hurdle rate. You won't have access to the target directly — this is a desk exercise, the way our analysts actually run a first-pass screen.
Keep the memo plain. No hedging language, no consultant filler. If the deal looks bad, say it looks bad and say why in two sentences. If it looks good, tell us the single biggest risk we should pressure-test in diligence.