The problem is not accuracy, it is defensibility
A widget that asks for revenue and growth, multiplies, and prints a figure is a lookup table with a form on it. It may even land close. It still leaves you with nothing to say when a buyer opens with a lower number.
A negotiation is a sequence of specific claims. The buyer says your retention will not hold. You need the cohort data and the point-by-point effect on the multiple, not a figure from a website you cannot cite.
Two businesses, identical revenue
Both of these run at $10,000 MRR, 85% gross margin, 2.5% monthly growth and 30 months live. They differ on the two fields a revenue-multiple calculator does not ask for: churn and customer concentration.
| Input, then result | Business A | Business B |
|---|---|---|
| Monthly recurring revenue | $10,000 | $10,000 |
| Annual recurring revenue | $120,000 | $120,000 |
| Gross margin | 85% | 85% |
| Owner earnings | $84,000 | $84,000 |
| Monthly revenue churn | 3.2% | 4.7% |
| Largest customer, share of revenue | 15% | 42% |
| Net effect of the five adjustments | 112% | 61% |
| ValuePulse range | $274,000–$328,000 | $149,500–$179,000 |
| Multiple of owner earnings | 3.6x | 2.0x |
| Multiple of revenue, as it comes out | 2.5x | 1.4x |
| A flat 2.5x revenue calculator prints | $301,056 | $301,056 |
| Overstated by | none | +$136,556 |
Computed by the engine on this site from the two input sets above. The flat multiple is calibrated generously — it is Business A's own revenue multiple, so the clean business is priced exactly right and the second one is overstated by 83%.
Why the gap is this large
Churn is not a modifier, it is the length of the revenue. Livmo, 26 Feb 2026 puts each point of monthly churn at 15–25% of valuation; we apply the midpoint, 20%. Concentration is our own model rule, published at −7%, −14% and −22%, and labelled as a rule rather than a citation.
What a defensible number looks like
- 01A base multiple tied to a size band, with the published comps and their dates.
- 02Each adjustment shown separately, with its source or an admission that it is a house rule.
- 03The dollar cost of every drag, so you know what to fix and what to concede.
- 04The things it does not measure, named out loud — owner dependency, platform risk, contract mix.
Ours is free and stays free, and the four sources it prices against are listed with their dates on the method page. Comps last refreshed 24 Aug 2026.