Cracking the Code

DECEMBER 1, 2009

Detailed SaaS Spreadsheet (Valuation and CAC benchmark). SaaS 13 Index Valuation. Impact of the recession on SaaS Sales&Marketing pr. SaaS business metrics: why are they different? S&M productivity (CAC ratio) for the SaaS 13 Index. Note: high CAC ratio means high productiviy (see blog post for definition).

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Software Review Technical Review Cloud Europe 48

Cracking the Code

OCTOBER 9, 2009

This strong recovery has highlighted the resiliency of the recurring revenue model in a downturn as well as the stength of the shift to soaftware-as-a-service and cloud computing. In other words, how much of the decline in revenue growth is due to signing up fewer customer vs lower revenues from each new customer. anecdotes. (13).

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Software Review Technical Review Cloud Europe 48

Both Sides of the Table

SEPTEMBER 28, 2013

In the startup journey if you have success in your early product launches, fund raising and PR you’re likely to get “inbound interest” from likely acquirers. Good press and industry mojo wasn’t enough to overcome the financial metrics of the business and the offers came in at more like $10 million. It was not.

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Startup Dilution San Diego Stock Options 417

Cracking the Code

MARCH 12, 2010

Given the predictability of SaaS GAAP revenues on a quarterly basis, the fact that the 08/09 projections were unchanged is not a surprise. Given that the revenues are not growing very fast, this means that most of the companies have reduced their sales force and focused on productivity improvement. SaaS 13 Index Valuation.

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Software Review Technical Review Cloud Forecast 63

Cracking the Code

NOVEMBER 13, 2008

The fact that SaaS valuations are being more affected by the downturn than the Nasdaq can be surprising given the supposed resiliency of the SaaS model (recurring revenues) but it translates the public investors belief that SMB software spend is going to be hit very hard by this recession. With this decline, the average EV/08 rev.

Software Review 48

Software Review Technical Review Valuation Portfolio 48

Cracking the Code

NOVEMBER 10, 2009

It is intriguing to see the M&A dynamics in the space, highlighting the interest of tech companies for recurring revenue streams - even SAP announced in their analyst call earlier this month that they were moving from perpertual licenses to five year term licences. Detailed SaaS Spreadsheet (Valuation and CAC benchmark).

Software Review 48

Software Review Technical Review IPO Cloud 48

Cracking the Code

NOVEMBER 10, 2009

Cloud accounting is all about matching revenue and costs to consumption…well, except for professional services! SaaS companies use different metrics to calculate renewals. Detailed SaaS Spreadsheet (Valuation and CAC benchmark). SaaS 13 Index Valuation. Impact of the recession on SaaS Sales&Marketing pr.

Software Review 48

Software Review Cloud Technical Review Sales Cycle 48

www.forentrepreneurs.com

FEBRUARY 2, 2010

Business model viability, in the majority of startups, will come down to balancing two variables: Cost to Acquire Customers (CAC) The ability to monetize those customers, or LTV (which stands for Lifetime Value of a Customer) Successful web businesses have long understood these metrics as they have such an easy way to measure them.

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Acquisition Cost Customer Entrepreneur 103

Cracking the Code

JANUARY 22, 2009

For SaaS companies, we found that MRR is the best metric on which to base sales commissions. While it may make sense to offer very slight adjustments for favorable payment terms and one time revenue, net additions to MRR should dominate the sales rep’s thoughts. How do you clawback revenue from the sales guy? Cindy said.

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Software Review Clawback Sales Salary 91

Cracking the Code

FEBRUARY 25, 2008

As I was building the spreadsheet, I also included the revenue multiples for this set of companies, both for the trailing 12-month (TTM) and the forward 12-month (FTM). Detailed SaaS Spreadsheet (Valuation and CAC benchmark). SaaS 13 Index Valuation. Impact of the recession on SaaS Sales&Marketing pr. My Investments.

Software Review 48

Software Review Technical Review Europe Venture Capital 48

Cracking the Code

DECEMBER 16, 2006

however, public SaaS companies like Concur, Saba, Taleo, LivePerson and Ultimate are growing 50-100% per year and trading at an average 5x trailing revenue multiples (I excluded salesforce leading the pack with 9x!) whereas traditional software companies of this size have a growth rate of less than 10% and revenue multiples of 2-2.5x.

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Software Review Silicon Valley Technical Review Software 48

Cracking the Code

JANUARY 28, 2008

Eloqua is bringing this revolution to the B2B marketers by providing on-demand applications and best-practice expertise for B2B marketers to execute, automate and measure effective marketing programs that drive revenue. Detailed SaaS Spreadsheet (Valuation and CAC benchmark). SaaS 13 Index Valuation. My Investments. anecdotes.

Software Review 48

Software Review Technical Review Los Angeles Europe 48

trada.com

APRIL 7, 2010

You have to constantly be clear about what you are trying to achieve, what metrics move the business forward, how to learn enough about something to form an opinion of it, and in what order you think doing things will set your business up to scale. Every day in a startup you battle the same two limitations: resources and time.

Stealth 40

Stealth PPC Advertising Conversion 40

crowdSPRING Blog

MAY 8, 2015

What is the ideal size and make-up of a team for a pre-revenue SaaS startup? The Angel VC: Key Revenue Metrics for SaaS companies – buff.ly/1INSu29. Valuation As A Scorecard – buff.ly/1F0CUyC. Steve Blank On Why Most Startups Fail, And It’s Got Nothing To Do With Technology – buff.ly/1IhCLrF.

Small Business 48

Small Business Design Social Media Startup 48

crowdSPRING Blog

MAY 4, 2011

Must read article for all startup entrepreneurs about valuation – [link]. Advertising CTR rates are abysmal and may be even worse than the metrics show – [link]. agency revenues – [link]. What It’s Like To Be An Entrepreneur – Mark Achler – [link]. Top 10 tips for email newsletters – [link].

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Social Media Small Business Design Media 92

Cracking the Code

MAY 25, 2010

A few highlights from the different keynotes and speakers On top of Jason, we also had the chance of having many great speakers at the event and here are a few quotes and notes that I have taken during the different keynotes and panels: Joe Payne, CEO of Eloqua moderated the panel on Revenue Performance Management. SaaS 13 Index Valuation.

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Software Review Cloud IPO Jordan 74

betashop.com

OCTOBER 8, 2012

From the start we said that we would never make a decision as to what features to build or what products to sell based on revenue alone, rather we would focus on things that make our customers smile and by doing so lots and lots of revenue will fall out over time. Never, ever, choose your investors based on valuation.

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Technical Review Technology Software Review Valuation 108

Cracking the Code

MARCH 10, 2008

I found this approach interesting, but it seems to me that gross margin is a more relevant benchmark than revenues, given that the GM of saas companies varies by type of application and size of the company (for example NetSuite went from about 50% GM three years ago to close to 70% today).

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Sales Software Review Marketing Technical Review 79

Cracking the Code

OCTOBER 10, 2008

Be prepared to cross the desert - SaaS requires R&D and sales expense up front for a multi-year stream of revenue, so it demands enough investment capital to fund 4+ years of runway. Effectively measuring and understanding your CAC and CLTV metrics are key to future success. Great list! I particularly agree on points #2 and #4.

Software Review 48

Software Review North America Europe Metrics 48

This is going to be BIG.

SEPTEMBER 7, 2012

There are a lot of people that artificially group together performance metrics for venture, and try to extrapolate successful stratagies from it. In the late 90's, it wasn't surprising that companies with no revenue that were funded at 100 million dollar valuations didn't survive. Do what you're good at. It's that simple.

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Later Stage Down Round Pre-Money Valuation Early Stage 99

Cracking the Code

SEPTEMBER 2, 2008

The Deutsche Bank report has a very interesting chart on the topic presenting the Free Cash Flow margins vs. the revenue growth four years post IPO for select software leaders: As you can see, with 20% Free Cash Flow margin and a 50% growth rate, Salesforce is well positioned in the pack! SaaS 13 Index Valuation. My Investments.

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Software Review Software Technical Review Cloud 48

Cracking the Code

JULY 6, 2007

SaaS business metrics: why are they different? I was surprised today when I went through the NetSuite IPO filling (S1) to see that it looked very much like any Enterprise software document - not a single mention of churn or % of recurring revenues. Different models require different performance metrics. Friday, July 06, 2007.

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Software Review Metrics Valuation Technical Review 66

Cracking the Code

FEBRUARY 4, 2008

T he response rate has been overwhelming and we ended up with 40+ companies and 80+ attendees, most of them CEOs and CxOs of leading public and private saas companies representing around 80% of the revenues of the SaaS industry in 2007. What metrics should I be using to drive a saas business? Whats the right strategy for Europe?

Software Review 48

Software Review South Korea IPO Portfolio 48

This is going to be BIG.

SEPTEMBER 12, 2022

There’s a metric f**k ton of empty commercial real estate out there—yet landlords continue to try to squeeze existing tenants for every last dime. I think the assumption is that when cycles snap back they come back so strong that future rental streams are likely to make up for missed near to medium-term revenue.

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Cofounder Venture Capital Community PR 121