SaaS

Cursor sold at ~20x ARR -- 3-4x normal premium SaaS. The multiple was earned by developer workflow lock-in at scale, proprietary training data advantages, and enterprise contract penetration. Most AI companies will not achieve this multiple. The question is whether your moat is real or replicable.

AI coding tools like Cursor get valued on strategic positioning and developer workflow penetration, not standard SaaS multiples. Cursor sold at ~20x ARR -- roughly 3-4x the typical premium SaaS multiple. Acquirers pay for defensible model quality, enterprise penetration, and daily active workflow integration that is hard to replicate.

The Rule of 40 (growth rate + EBITDA margin >= 40) is the baseline metric buyers use to screen SaaS companies. In 2026, buyers weight profitability more than growth -- a 35% Rule of 40 with positive FCF often trades better than a 45% Rule of 40 with deep losses. NRR and growth direction matter as much as the static score.

Yes, bootstrapped founders can achieve significant exits — including eight-figure and higher outcomes — without ever raising outside capital. The common thread is using capital constraint as a forcing function for real revenue discipline, though bootstrappers can face ceiling risk when well-funded competitors scale faster.