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.
Read More

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.)
Read More

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.
Read More

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.
Read More

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.
Read More

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.
Read More

Apr
30
In just the last few weeks, we have seen Marketing Evolution raise $20.6 million in Series B funding, Uberflip raise $32 million in Series A funding, and Pusher raise $8 million in Series A funding. These deals are just part of a larger trend of SaaS Capital portfolio companies either raising equity or being acquired.
Read More

Mar
01
Ok, well, “magical” might be a little strong, but there are circumstances where this structure does have specific benefits that are very valuable. In the short post below, we describe how to quantify those benefits to your stakeholders.
Read More

Feb
13
Rob and I just returned from our annual pilgrimage to San Francisco for SaaStr Annual, and here are our observations from the conference this year.
Read More

Dec
15
Last December we sent out a quick year-end recap email and blog post that was very well received, so here it is for 2017.
Read More

Nov
30
Last month I had the pleasure of presenting at the KCSaaS event in Kansas City, MO. KCSaaS is a grassroots industry group spearheaded by longtime SaaS sales executive Mike Poledna. He started the group about a year ago after not finding many SaaS networking and knowledge share opportunities in Kansas City.
Read More

Oct
05
We recently hosted a webinar on ASC 606 with SaaSOptics and CPA Steve Sehy. This blog post is meant to summarize some key points from the presentation relative to timing and magnitude.
Read More

Jun
29
Last month my partner Rob and I attended two events focused on customer success (CS) and wanted to post our takeaways. The first event was a half-day summit we held for our own SaaS Capital portfolio companies. The other event was the Pulse Conference.
Read More

May
05
The Rule of 40 postulates that the growth-rate-plus-profitability-margin of a healthy growth stage SaaS company should be at least 40%. It captures both valuation drivers of a SaaS business: growth and profit, and trades them off dollar for dollar. While this is a compelling and fascinating ‘rule,’ it is by no means the cut-off line between healthy and unhealthy.
Read More

May
01
Over the years, we have analyzed thousands of SaaS companies and we firmly believe the best metric for benchmarking churn is gross revenue retention which should be benchmarked against companies with similar annual contract values or revenue values per customer.
Read More

Apr
05
The better a SaaS business is at keeping customers, the faster it will grow. This is not a surprise; however, it’s an assertion that is not typically backed up by real data. The graphs below are based on data obtained from our recently completed survey of over 700 private, B2B SaaS companies and give objective, real-world underpinnings to the relationship between retention and growth.
Read More

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.
Read More

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.
Read More

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.
Read More

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.
Read More

We were looking for a modest amount of capital to invest in additional product development and acceleration of customer acquisition, and the SaaS Capital line-of-credit provides the right amount of capital in a non-dilutive form.

Mark Rankovic

CEO, Certica Solutions

What are others saying?

 

Contact Us:

SaaS Capital

Cincinnati, OH
(p) 513.368.4814

Seattle, WA 
(p) 303.870.9529