On the heels of last week’s SaaS Customer Retention Roundup, we thought we’d spotlight some of our favorite SaaS financing pieces. The many facets of SaaS financing remain among the most confusing, overwhelming and scary topics for young SaaS founders. SaaS finance success requires careful research, patience, critical thinking and brutal honesty with yourself. The stakes are high and the wrong choice could devastate your company before you even get off the ground. So what do you do? These 5 articles will get you started!
This article earned its spot at the top of our list due to High Alpha writer Blake Koriath’s thorough vision for the piece. Intended for use as a SaaS finance directory of sorts, Koriath provides concise answers to common SaaS financing questions and gives powerful advice to founders who may be new to this complex topic. If you only read one article on this list, make it this one.
I hope this list can serve as a one-stop shop for SaaS entrepreneurs who want a quick reference guide on early-stage SaaS finance.– Blake Koriath
The unaccredited SaaSOptics writer and presenter behind this fantastic multi-media piece takes readers on a deep dive into SaaS finance. Touching on a broad spectrum of financing concepts from SaaS subscription models to new bookings, deferred revenue, unbilled AR and beyond – the author writes with a clear desire to help founders conquer the many SaaS financing hurdles. Paired with the article itself is a 39-minute video presentation on SaaS revenue recognition fundamentals, making this offering too good to miss. Great job SaaSOptics!
Invest some time and learn the basics. Be able to discuss finance terms like revenue, revenue recognition, revenue projections, and EBITA along with metrics terms like bookings, renewal rates, MRR, and churn.– SaaSOptics
No SaaS finance roundup would be complete without input from the brilliant mind of ProfitWell‘s Patrick Campbell. Known widely for his critical thinking and revolutionary SaaS data discoveries, Campbell beautifully explains the ins and outs of all metrics mentioned in the title and more! Detailing how each interacts with one another and when and why they matter most, this article backs its findings with data collected by Price Intelligently, concluding with a 20-slide deck explaining these concepts even further.
Finance and accounting team members are the unsung heroes of the subscription and SaaS– Patrick Campbell
world,because people relegate them to just being “bookkeepers” or the people that “keep us out of trouble with our taxes.” In realitythough, an A-list accountant or finance manager at your company is likely one of your most prized assets.
The SaaS CFO‘s Ben Murray shares his guide to creating a SaaS financial forecast, simply titled “The SaaS Financial Plan”. Explaining that many Excel forecast models are too complex, Murray includes step-by-step instructions with links to input cells so that users can easily create their first forecast themselves. While the article features a detailed description of how to properly build your forecast, Murray includes a 5-minute video explaining this process further, telling you all you need to know before downloading the forecast at the free link included.
I created the SaaS Financial Plan in Excel, so that SaaS startups and SMB’s could easily create their own financial forecast. Many Excel forecast models become very complex, but I created step-by-step instructions with links to input cells so you can easily create your first forecast.– Ben Murray
In this article, Chargebee’s Molly Otter responds to Point Nine Capital‘s well-known piece on the rise of non-VC-compatible SaaS companies. In the original article, Point Nine’s Clement Vouillon argues that bootstrapping a SaaS company to between $300K and $10M ARR is increasingly achievable in the modern SaaS climate. Otter explains why this is and sets out to provide other funding alternatives to these “non-VC-compatible” SaaS companies. MRR line, Revenue-based financing, A/R factoring, and Customer self-financing are among a broad range of alternative financing options explored in this article, but Otter leaves the final choice up to you. Her intention was to give founders the knowledge they need to decide which financing option is right for them, and we think she achieved this beautifully!
Whichever option you choose, it’s important to understand the pros and cons. You may not be signing away equity, but you’re still making a financial choice that will impact your company for years to come.– Molly Otter
Thanks so much for joining us for another SaaS roundup. We hope to see you here again next Monday!