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SaaS Cybersecurity Due Diligence

Imagine that you have just signed an LOI for the acquisition of your company. You, the CFO of a mid-sized SaaS company have spent the last 2-3 years getting your financials, your retention, CAC and other key metrics, in shape so you are offered an attractive valuation multiple. Your investors are excited about seeing the return on their money. Now comes the final due diligence, including a cybersecurity review. You employ solid cybersecurity tools and procedures, so you think you are pretty safe.

February 28, 2020

The Three Rules of Freemium

I have a bit of a love/hate relationship with the freemium model. Done right, freemium can lead to amazing success. One of the best examples is Dropbox, which Tomasz Tunguz called the “King of Freemium”. What makes the company unique, he argues, is how it transformed its free users into evangelists.

February 25, 2020

Capitalizing Software Development Costs in a SaaS Business

At SaaS Capital, we have a lot of respect for GAAP financial statements. We think GAAP financials generally do a better job than cash-based financial statements in reflecting the underlying financial performance of 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.

February 18, 2020

2020 SaaS C-Suite Evolving to Support Product and Customer Lifecycle Management

SaaS management is evolving to bring functions together across the business lifecycle in a high-performance SaaS model. The SaaS operating model requires execution across functional activities. Metrics and analysis of product and the customer lifecycles is fundamental to growth decision-making in a SaaS company.

February 13, 2020

4 Ways Financial Leaders Can Become More Data-Driven

Business technology continues to evolve at lightning speed. As more applications transition to the cloud, information has never been easier to gather. Data is becoming more and more essential to remaining competitive and succeeding in any industry.

February 11, 2020

How to Calculate Customer Acquisition Cost (CAC)

Whether you're trying to work out how efficient your sales and marketing strategies are, or determine how profitable your current customers are, it's vital to keep a pulse on the health of your SaaS business. Thankfully, there's a simple performance metric that does both.

February 4, 2020

SaaS 2020: Will an Avalanche of VC & PE Capital Change 2020 Budgets?

The SaaS 2020 outlook for CFOs reminds me of swash (look it up – turbulent water caused by an incoming wave hitting the shore and meeting the outgoing backwash from the previous wave). More capital invested, more SaaS offerings, continued expectations of rapid growth are running smack into limits on the availability of qualified employees and a potential economic slow-down which may or may not happen.

January 30, 2020

How Revenue-Based Financing and Venture Capital Funding Work Together

As alternative financing solutions attract more attention from entrepreneurs, some VC investors are noticing more startups are turning to these options for their growth and working capital needs, many times mixing and matching RBF with a term loan, line of credit with a forward commitment, or both. These flexible, non-dilutive financing solutions scale with a business’ growth, enabling entrepreneurs to focus on their business without giving up equity, personal guarantees, or board seats; it’s understandable why entrepreneurs are increasingly seeking such solutions to reach their next growth milestone.

January 28, 2020

Do This, Not That: Prescriptive Analytics in Sales and Marketing

Sales and marketing organizations are grappling with a flood of data and deploying analytics to improve the quality of the insights being generated. While the underlying analytical methods have been around for decades, advanced analytics has only recently become accessible for most business-to-business (B2B) organizations via the confluence of abundant data, cheap computing, open sources and a large ecosystem of technology applications.

January 21, 2020