SaaS Capital Blog

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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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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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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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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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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They are a flexible, non-dilutive option and they really understand the needs of a SaaS business. Due to their extensive reach and best practices insight from other SaaS companies, SaaS Capital also adds significant value to Updox beyond just capital.

Michael Morgan

CEO, Updox

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