When I was a CFO at a private equity (PE) backed company, I was always a little envious of the PE folks. They got so many investment looks at different SaaS companies. And they built their SaaS muscle through the management of their SaaS portfolio companies. That’s changed now that I’m a fractional SaaS CFO. […]
Author: Ben Murray
Simple Financial Planning for SaaS Founders
The fourth quarter is traditionally “budget season.” For those in financial planning and analysis (FP&A), you may be cringing at reading the words budget season. I cringe when I think about the many budget memories and late nights at public companies. Is v.21 of the Board deck ready? Ugh. Founders, we are not going down […]
How to Calculate Your Cash Burn Rate
Cash is always king. Forget SaaS metrics…no, just kidding. Whether you are a startup or an established SaaS company, cash is always on your mind. It’s not just “do I have enough” cash. It’s also where in my company do I invest the cash. Understanding your cash burn rate is a critical factor in how […]
How to Benchmark Your OpEx Profile
When I review a SaaS P&L for the first time, I take a high-level approach to understand the financial health of the business. I break the P&L into two sections, the “top half” and the “bottom half.” The top half contains revenue, COGS departments and our gross profit. The bottom half contains our operating expenses […]
What Should Be Included in SaaS COGS
What should I include in SaaS cost of goods sold (COGS)? This is a very common question from SaaS founders and finance teams. It’s also an important question and something that you need to get right. The proper coding of SaaS COGS versus operating expenses (OpEx) is important for many reasons. First, we must understand […]
Financial Planning and Analysis | Key to Strategic Finance
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, […]