First, your assumptions on net income are too pessimistic. Small founder-operated SaaS can be extremely profitable.
Second, and more importantly, you are ignoring concepts of LTV and NPV of future cash flows.
Assuming 80% SDI and a churn-rate that is < 5% (ideally < 3%) you are looking at a business worth $700-950k right now. Why? An income stream from a growing high margin SaaS business is a coveted and valuable thing.
Finally, when you have a business with 300k ARR you begin to unlock more options for yourself -- small acquisitions (traffic/content/funnel), ads, product improvements.
The likely path here is that their income will continue to grow and they will either be taking $200k a year in income or sell for > $2 million in a couple years, or both.
Having built a small SaaS business to this size myself for many years, i can totally recommend this path for independence and financial freedom.
Are they? On the contrary. You are telling me that out of 100k of gross sales, after discounting: Operational costs, insurance, income taxes assuming at the end if you get 67K is pessimistic? I didt not even budget money for sales and marketing.
> Second, and more importantly, you are ignoring concepts of LTV and NPV of future cash flows.
I am not, that was not even a question on my initial answer. My original answer was to deny this: Operating a 2-person 25k MRR company during 2 years will set you for life. My answer is no. You are assuming a lot of other stuff that was never in the original discussion.
> Assuming 80% SDI and a churn-rate that is < 5% (ideally < 3%) you are looking at a business worth $700-950k right now. Why? An income stream from a growing high margin SaaS business is a coveted and valuable thing.
Yes, but that is trivially true. If you assume the company will grow the valuation will reflect that. Everybody knows that. That was not in the original discussion. This also depends on the business model of the company, a SaaS company critically depending on a 3rd part ecosystem is significantly riskier than an independent one.
> Having built a small SaaS business to this size myself for many years, i can totally recommend this path for independence and financial freedom.
I agree. But you need more than 200k USD to be set for life.
I agree with you that $333USD/mo is not a ton but 5X that is more than lots of people live on in north america.
My friend lives on ~$2,000/year in Southeast Asia, but just provides for himself.
150k * 0.66 (extremely optimistic gross to net-income factor) = 100K
You and me have different notions of "set for life"
EDIT: I fudged a factor of 2 in the math, the final number is 200k, my point still stands.