SaaS Growth Metrics

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

There are several key SaaS metrics to know in evaluating a startup.

Here’s a summary of the key metrics:

SaaS Quick Ratio -- New MRR divided by the churned MRR.

This measures how efficient your growth is.

Low efficiency will make scaling difficult.

LTV: CAC -- Lifetime value to Cost of Customer Acquisition

This measures how long customers continue to use the product and compares it to the cost of acquiring that customer.

An early-stage company should see a 3:1 ratio.

Over time, it should improve to 5:1 and later to 7:1

Churn Rate

This measures how many customers drop off during a time period, such as a month.

Segment the customers into groups to examine churn to see where the business is not succeeding.

40% Rule

Growth and profitability should add up to 40% or more.

There’s a tradeoff between growth and profitability.

The more invested in growth, the less profitability.

This shows the viability of the business regardless of whether or not they focus on growth or profitability.

Use these metrics to understand a potential startup investment.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

Check out our other podcasts here: https://investorconnect.org/
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How To Build Momentum in Your Fundraise

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Fundraising has its ups and downs, including long patches of slow-paced activity.

Here are some key steps in building momentum for your fundraiser.

Always break the total fundraising into smaller rounds.

This makes the raise manageable from the start.

Do the easy ones first.

Investors who know you and believe in the deal will sign up the quickest.

With those signups, you now have money in the deal.

Use this to spur the momentum to other investors who are not yet ready to invest.

Show why the other investors joined the round.

Strive to reach the halfway point.

From there, the optics on the deal will look better to the prospective investor.

The risk of the deal not getting funded goes way down.

Build a list of interested and committed investors.

Assign an amount to each one and map them out on the remaining portion to be raised.

Show all of them how this will close the round.

For the remaining investors on the list, give them a deadline and push them to pass.

This takes them off your list and lets you focus on closing the interested and committed investors.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

Please follow, share, and leave a review.

Music courtesy of Bensound.

How To Show Your Market Size

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

The market slide in the startup fundraise pitch shows the total available market opportunity.

Here are some key steps in showing your market size.

Show the components of your market, including the number of buyers and average selling price.

Include the source of the market research so others can retrace your reference.

Define the market segments clearly so there’s agreement about what part you are pursuing.

Include serviceable and obtainable sizings as well. Avoid phrases such as “only 1% of the market gives us $10B in revenue”.

This means nothing to the investor.

In fact, the investor is left wondering how you will enter the market.

Instead, focus on the first twenty customers you’ll pursue.

Call this out as the beachhead market and show how you have already contacted the first twenty customers and have some traction with them.

It’s important to show the overall market as well as the initial segment you will pursue.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

_______________________________________________________

For more episodes from Investor Connect, please visit the site at: http://investorconnect.org

Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/

For Feedback please contact info@tencapital.group

Please follow, share, and leave a review.

Music courtesy of Bensound.