Table of Contents
What is SaaS capital?
SaaS Capital is the leading provider of growth debt designed explicitly for B2B SaaS companies. SaaS Capital was the first to offer lending alternatives to SaaS businesses based on their future recurring revenue.
How do you calculate ARR in capital budgeting?
Here is an example of an ARR calculation.
- Calculate the average annual profit of the investment.
- Subtract the depreciation expense.
- Divide the annual net profit by the initial cost of the asset.
- Multiply by 100 to arrive at the percentage rate.
How capital-efficient are SaaS companies?
The healthiest SaaS companies (as measured by the Rule of 40) are often the most capital-efficient The Rule of 40 is a popular heuristic to gauge the business health of a SaaS company. It asserts that a healthy SaaS company’s revenue growth rate and profit margins should sum to 40\%+.
What is a good valuation for a SaaS business?
For businesses valued over $2 million, you can expect a 6.0x to 10.0x multiple. While the general valuation drivers above are a key consideration, it’s important to note that every SaaS business is unique and each has its own priorities in terms of metrics.
What is the difference between total capital raised and arr?
Total capital raised is often neck-and-neck or slightly higher than ARR. For example, Zscaler raised $148 million to get to $146 million of ARR at IPO and Sprout Social raised $112 million to get to $106 million of ARR.
What are the most important SaaS metrics for investors?
Churn: It is well documented that customer metrics are of vital importance for SaaS business owners and consequently they are of great interest to investors. Churn, lifetime value (LTV) and customer acquisition cost (CAC) are analyzed by investors when appraising the customer base and by virtue the quality of the business’ revenue.