As SaaS companies scale, there is an important function that must be added to your finance org chart. This function is the financial planning and analysis (FP&A) department. I rose through the ranks of the FP&A in public companies, so I have experienced all shapes and sizes of this critical department. Fundamentally, an FP&A team […]
SaaS Valuation Tips for Founders
SaaS valuations can be a tricky subject for founders. There’s a ton of info on the Internet, especially for public SaaS companies. Unfortunately, for private SaaS companies, there is only random valuation data and rules of thumb. There are no hard and fast rules that pinpoint the value of your private SaaS company. To help […]
The Role of the SaaS CFO
I speak with many SaaS teams who do not have a CFO or finance team yet. The focus is on product, go-to-market, and building out your team to support revenue delivery. Then, you’re at several million of ARR and realize that you can’t manage your business with just your bank account and poorly formatted and/or […]
How to Analyze the Cost of Your First Sales Team
It’s our jobs as operators of our business to take calculated risks, but we also don’t want to blindly throw away hard-earned cash. When approaching a new investment, we must gather key inputs and assumptions from our team. Your SaaS CFO then performs her magic to scrutinize that investment. Does it pass or fail? An […]
How to Calculate SaaS Revenue Retention
Recurring revenue businesses have become the stars of the investment world. Investors love stable, recurring revenue streams. Valuations are tied to the health of our recurring revenue. But how do we measure the health of our recurring revenue? We use gross dollar retention (GDR) and net dollar retention (NDR). As operators of our SaaS businesses, […]
LTV to CAC Ratio of Three | Myth or Legend
Almost everyone in SaaS has heard of the LTV to CAC ratio. And almost everyone has heard that we should target an LTV to CAC ratio of at least three. This was popularized (I believe) by the great content published by David Skok on SaaS metrics. But what does it mean to have an LTV […]
SaaS R&D Tax Credit | What Founders Need to Know
Taxes! It can be a scary subject both personally and for your business. As a CFO, I don’t like to bend the rules. Who wants to be audited? But what if I could tell you about a tax credit that was almost custom made for US-based SaaS companies? It’s called the R&D (research and development) […]
Five Critical Reports to Manage Your SaaS Business
There are hundreds of reports that we could create to manage our SaaS businesses. In fact, I’m sure our CRM, accounting, and BI systems are littered with reports that no longer see the light of day. With so much data trapped in our SaaS business, it can be extremely hard to limit our focus to […]
How to Grow Your SaaS Business with Debt Financing
You’ve bootstrapped your SaaS business to thousands or millions of dollars in revenue. You feel like you have more potential to grow, but you are limited by the cash in your bank account. You need capital, but where do you start? We are all familiar with the traditional path of equity financing, exchanging ownership in […]
The Role of Finance and Accounting in SaaS
The role of finance and accounting in a SaaS company is probably a mystery to most. Yes, we pay the bills and say “no” to a lot of expenditure requests, but there is a lot going in the back office. And, as your SaaS business scales, so must the capabilities of your finance and accounting […]