When Do You Need an Investor Teaser Template? If you are looking for funding or need and an easy way to respond to serious private equity inquiries, then an investor teaser template should be ready to go on your shared drive. This free PowerPoint template (download below) is based on a real-life teaser document and […]
What is Monthly Recurring Revenue in SaaS?
Guide to Monthly Recurring Revenue (MRR) There is no shortage of terms and acronyms in SaaS, and monthly recurring revenue (MRR) is one of them. SaaS revenue terms can be quite confusing, especially around recurring revenue. Is it MRR, ARR, ARPA, revenue recognition or bookings? In this post, I’ll define monthly recurring revenue, its many […]
Sample Chart of Accounts in SaaS
Sample Chart of Accounts for SaaS I’ve received quite a few requests about a sample chart of accounts for SaaS, so let’s address a super critical component of your accounting. Not a “fun” topic per se, but you need to understand the concept behind your chart of accounts and implement the correct structure if you […]
Five Year Financial Projection Template
Five Year Financial Projection Template – Solving My Pain Creating a five-year financial projection or any long-term financial forecast greater than two years is a time intensive effort. You need to add X number of managers per staff, you need enough sales reps to support bookings, you need more technical support specialists as your customer […]
How to Prepare for M&A Management Presentations
Management Presentations in M&A Due Diligence The banker said to block my calendar for management presentations. Excuse me, what are management presentations? And for two weeks? Yes, and this is only the halfway point. The real “fun” in due diligence comes after the management presentations. However, before we get too far, let’s break down what […]
What is Net Negative Churn in SaaS
Net negative churn occurs when your expansion revenue from existing customers totals more than your lost revenue from existing customers. This SaaS metric does not factor in any revenue from new customers, just existing customers. As Nathan Latka puts it in his “The Top” podcast, this is the holy grail of SaaS. Your recurring revenue […]
SaaS Accounting Tips for Founders
SaaS Accounting Tips SaaS accounting is probably not every SaaS founder’s favorite topic. However, as you scale, it is critical that you implement an accounting framework that will provide you and your team the necessary data to manage your business. In this post, I offer several actionable SaaS accounting tips for founders and their accounting […]
SaaS Showdown – CAC Payback Period vs LTV/CAC
CAC Payback Period vs. LTV/CAC This post was inspired by a SaaS metrics question posted on Quora. The user asks, “what is more important? CAC Payback Period or LTV/CAC?” Great question, but it left me scratching my head, because it’s a difficult question to answer anecdotally. Both are important in your SaaS business but should […]
How to Calculate and Understand the SaaS Quick Ratio
What is the SaaS Quick Ratio? You work hard to land new customers, but then you see your revenue growth and cash slip away through customer downgrades and churn. Enter the SaaS Quick Ratio. Different than the SaaS Magic Number which measures the efficiency of your recognized revenue growth against your sales and marketing spend, […]
Committed Monthly Recurring Revenue (CMRR) Defined
What is Committed Monthly Recurring Revenue (CMRR)? Committed monthly recurring revenue (CMRR) is a forward-looking SaaS metric that combines actual monthly recurring revenue (MRR) data with known bookings and churn data. It begins with your existing MRR (say, last month’s recognized MRR), adds known new bookings, and subtracts known cancellations and downgrades. For businesses who […]