SaaS Capital Blog

Dec
06
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.
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Nov
26
Once a week or so a company will reach out to us looking for “bridge financing” that will carry them to their next funding event. 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. (Except when buying a new house.)
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Nov
01
Raising capital can be a challenging, sometimes grueling, process. In the last 20+ years, I have seen how the sausage is made from many different perspectives. Prior to starting SaaS Capital in 2007, I was a partner at a venture capital firm with a focus on funding Series A and B for software companies. It was there that I saw the specific challenges early stage businesses face. 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.
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Sep
14
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. It is the unit economic driver of value and profits that is obscured by normal GAAP financials.
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Sep
10
While predicting the start of the next recession is impossible, we know there will eventually be one. 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.
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Jun
13
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.
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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
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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Jul
18
SaaS Capital has had nine of its companies “price” their equity in the last 24 months through either a sale of the business or a substantial equity raise. Here's a look at the valuations.
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Jun
30
We recently published our second research brief of 2016. This study, on how different contracting lengths impact SaaS operating metrics such as revenue growth and churn, is based on data from over 400 SaaS companies whom we surveyed at the beginning of the year.
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Jun
28
EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is useful in valuing a company but it certainly does not equal “cash flow.” EBITDA was invented as a way to value companies on an ‘apples-to-applies’ basis; it eliminates the impact of balance sheet choices and different tax rates. That is all fine and good, but...
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Jun
02
While the Customer Acquisition Cost (CAC) Ratio has been around for years, and many best practices have been published around this critical SaaS metric, in recent conversations with SaaS-company CEOs about benchmarking, we found a lot of companies still aren’t tracking it.
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Apr
28
New data from SaaS Capital's fifth annual SaaS benchmarking survey shows the relationship between retention rate and a company's ability to grow top-line revenue.
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Mar
24
Gross Churn/Retention is a measurement of annual revenue lost from a SaaS company’s installed base of customers, not accounting for cross-sells, up-sells, price increases, or organic account growth.
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Nov
12
SaaS Capital explores the key SaaS metrics: net revenue retention, gross revenue retention, customer count retention, monthly churn, and cohort analysis
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We didn't want to raise a traditional VC round, and SaaS Capital gave us an awesome alternative. We are excited about working with a team that understands SaaS businesses better than anyone else.

Jessica Mah

Founder and CEO, inDinero

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(p) 513.368.4814

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