SaaS Capital Blog

Mar
15
We have encountered a recent spike of interest in junior debt for SaaS businesses, and since we provide both senior and junior loans (although mostly senior), we thought we would share our perspective on the types of scenarios where subordinated debt makes the most sense.

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Mar
09
Accounting rules are very specific on some things, and surprisingly unhelpful in other areas. There are no Generally Accepted Accounting Principles (GAAP) rules on the type of costs that are included in Cost of Goods Sold (COGS). This is unfortunate because the gross margins of SaaS businesses are very important to the overall performance, profitability, and valuation.

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Feb
24
Two weeks ago, Todd Gardner and I attended the SaaStr Annual conference in San Francisco. This is the SaaS-business-model-specific conference put on by serial SaaS entrepreneur and VC Jason Lemkin. This was the third year of the event and we’ve gone every year. Below are our takeaways from it...

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Jan
04
The following article was originally posted on LinkedIn by Yoav Schwartz, the Co-Founder and CEO of our new portfolio company, Uberflip. It provides a clear example of how debt can be used strategically to fund the growth of a SaaS business.

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Dec
13
We recognize there are a few weeks remaining in 2016, however, it has already been a record year for SaaS Capital, so we thought we would get our update out a bit early.

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Nov
21
We recently published an analysis of SaaS company departmental spending segmented by revenue level, growth rate and annual contract value (ACV). Among the interesting results, we found that high ACV products (annual contract value over $150,000) have higher cost of goods than lower priced products, and that medium ACV products ($5,000 to $150,000) appear to be the most expensive overall to deliver and support.

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Nov
01
After reading our recent white paper What is My SaaS Company Worth? one of our portfolio company CEOs reached out asking about the premium a SaaS business would garner in a strategic sale vs. a re-cap or equity raise. It struck us that this may be a topic other companies might have questions about so we have addressed it here.

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Oct
25
It might be a good time for SaaS companies to start considering ways to recession-proof their business. Focusing on customer retention, always a good idea, is particularly critical when customers are looking to cut costs.

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Oct
11
I had an entrepreneur ask me a few weeks ago - “What are SaaS companies ‘going for’ these days?” I said, well, it depends on a number of factors, but 5 times annual run-rate revenue is average.

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Sep
02
Stock warrants are a common component of venture debt, and while typically small in relation to the other overarching economics, they are important because they have to do with the cap table, which we all know is a zero sum game. They also can be confusing because they have a unique lexicon, and what information is on the web about warrants focuses more on the legal and tax ramifications rather than the practical.

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We found the SaaS Capital solution to be a great way to finance our growth compared to those options. It’s a long-term solution, and is particularly well suited to SaaS businesses like ours who have built predictable and scalable customer acquisition channels.

Ed Molyneux

CEO and Co-Founder, FreeAgent

What are others saying?

 

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