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Private SaaS Company Valuations: 2019

Long-time readers of our work may recall we have strived to shed a light on the opaque, confusing and, volatile practice of valuing private SaaS companies. As we near the mid-point of 2019, we thought it would be good to check on current private company valuation multiples.

Capitalizing Software Development Costs in a SaaS Business

GAAP is the standard, and if your numbers are not based on GAAP, then they do not actually conform to a standard at all. That said, when it comes to the capitalization of software development costs, GAAP has it dead wrong.

Is anyone adopting ASC 606?

The adoption of new accounting rules is not a topic we normally bring up in conversations with SaaS companies, but the ASC 606 change has created enough confusion (and work) that we have found ourselves talking about it more than we’d like.

SaaS Benchmarks from Our 2018 Survey

Each year SaaS Capital conducts the largest survey of its kind to gauge the overall performance of private B2B SaaS companies. Here are the results from the survey we conducted in 2018 which covered more than 900 SaaS companies.

Should Your SaaS Company Have a Channel Sales Strategy?

Over the last year or two many of SaaS Capital’s portfolio companies have initiated channel sales strategies, and many more are contemplating it. Given the trend, this was the focus topic at a recent portfolio company CEO roundtable.

Why It’s a Bad Idea to Ask for a Bridge Loan

In a way, all financings are bridge financings to some future event. However, the specific request for a short-term bridge loan carries with it unique challenges. I honestly believe many of these companies think bridge financings are a standard part of the funding landscape but, in reality, they are not.

Preparing a SaaS Company for a Capital Raise

Since creating SaaS Capital to focus exclusively on B2B SaaS businesses, I've now had the opportunity to speak with thousands of SaaS founders and company executives and see the specific challenges SaaS businesses face when raising money.

A Warning About SaaS Lifetime Value Calculations

When I first heard about the Lifetime Value (LTV) to Customer Acquisition Cost (CAC) metric many years ago, the economics major in me got very excited. I was already well into the software-as-a-service (SaaS) financing business at the time, and this ratio seemed like the most elegant way to express how the business model really worked.

How Do SaaS Companies Perform in a Recession?

To enhance our understanding of the SaaS business model and better prepare ourselves and our portfolio companies for an eventual economic downturn, we wanted to learn how software-as-a-service companies performed through the previous recession.

2018 Growth Benchmarks for Private SaaS Companies

Revenue growth is the most important metric for valuing a SaaS company, yet it’s hard to find good benchmarking data for a relevant peer group. Comparisons to multi-billion-dollar public companies are not helpful, and neither are the anecdotal data points from angel investors or VCs. To provide some better context on this question, we surveyed over 900 private SaaS companies regarding their 2017 revenue growth.