SaaS Capital Blog

SaaS Company Cash Flow Dynamics


Cash Flow Dynamics in a Shrinking SaaS Business

If a SaaS business is charging its customers annually in advance, and that business starts to shrink, teams and investors must be acutely aware that its cash flow will go down much quicker than the P&L will indicate.

When is a Good Time to Sell a SaaS Company?

A feature of a sustainable recurring revenue business model is that, unlike other business models, you can pretty much know your company’s valuation at any time, and depending on how confident you are in your forecasts, project it out into the future as well.

SaaS Industry 2019 Observations and Thoughts for 2020

Below are some thoughts on the SaaS industry this past year, our perspective on the market going forward, and a short recap of our previous year and decade.

Retention Benchmarks and Analysis for Channel Sales in SaaS

For the last two years, we have devoted several questions in our annual SaaS metrics survey to the area of channel sales. In our recently released research brief on revenue retention, we analyzed the channel sales data in relation to churn.

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.

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.

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.