FE International have brokered the sale of over 50 SaaS businesses. They share their best advice on how to value a software-as-a-service business. If you’re building a SaaS business, this is a must-read.
Learn how to value a SaaS business, which metrics matter the most, how to increase the value of your business before selling, what makes a business more saleable and how to sell a SaaS business.
Getting Buy-in from Investors & Board Members
Investors and board members don’t care about detailed growth and marketing metrics. They do however care about market size, revenue, customer lifetime value (LTV), cost of customer acquisition costs (CAC), comparison of customer cohorts, competitive comparison. Rand Fishkin talks through how to get the buy-in you need from investors and board members by telling your story in the language they understand.
Optimise LTV to CAC Ratio for Growth
Building on the previous post, Geoff Roberts at KISSMetrics, explains why, if growth is your goal, then getting a handle on your LTV to CAC ratio is the key to unlocking more investment in marketing. The data tells us that, on average, for a healthy SaaS business “we know that for every $1 we spend to acquire a customer, we get $3 back in revenue.”
Patrick Campbell of ProfitWell, explains why benchmarks commonly cited by investors and advisors are often way off the mark. For example, Monthly Gross Churn should be closed to 2% than 5%, Expansion Revenue (revenue from existing customer base) should be closer to 30% than 10% and that an acceptable growth rate is a function of size.
How to Write to an Early Stage Investor
Michael Siebel at Y Combinator presents a simple template for a letter to a potential seed investor.
What VCs Look for in an Early Stage SaaS Startup
Nakul Mandan at Lightspeed Venture Partners tells us what he looks for in a Series-A stage SaaS startup. The key things are: 1) Why now?, 2) product category, 3) market size, 4) Distribution, 5) long-term moat.
Series A Rounds Slip
Should Brexit Stop You From Starting a Business in the UK?
Here are 8 factors to consider if you’re considering starting a business or opening an office in the UK post-Brexit.
What is PSD2?
Upcoming EU regulations are due to compel banks to open-up their account data to 3rd-parties. This is a huge opportunity for Fintech startups. Starling Bank do a good job of explaining what PSD2 is all about.
Universal Basic Income
With ‘jobs’ about to disappear at an exponential rate, Tim O’Reilly makes a superb case for why we need to revisit the idea of a Universal Basic Income for all.
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