Quote Info

  1. The number of SaaS IPOs has more than doubled in the past 12 years. t
  2. The number of rounds of financing each company raises before IPO has nearly doubled from 2.5 to 4.5, i.e. Series B/C to Series D/E. These figures exclude seeds, which I’ve defined as rounds less than $1.5M.
  3. The total amount of cash raised before IPO has doubled from the ’98 cohort, adjusted for inflation.
  4. The median round sizes across the life of the company have remained relatively constant.
  5. IPO offerings have increased by about 40% in size
Tomasz Tonguz

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Publicly-traded SaaS companies have an average Revenue Per Employee of $200,000

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Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing

Getting paid in advance is really smart idea if you can do it without impacting bookings, as it can provide the cash flow that you need to cover your cash problem

If a software company grows at 20% annually, it has a 92% chance of ceasing to exist within a few years

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SAAS companies that are focused mainly on enterprise sales have higher levels of professional services

Because of the losses in the early days, which get bigger the more successful the company is at acquiring customers, it is much harder for management and investors to figure out whether a SaaS business is financially viable.

The median TTM revenue growth rate + adj. EBITDA margin for publicly traded SaaS companies was ~37%, implying that just under one half met or exceed “The Rule of 40%”

To establish a revenue or lead-commitment based on your funnel metrics and revenue-growth goals, work backward from the gross revenue amount that marketing is responsible for generating (generally around 40%)

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In 2017, the world invested around 3.4 billion U.S. dollars in small hydropower technologies, down from 3.9 billion U.S. dollars in 2016.

In contrast to these, the median annual churn rate for smaller, private SaaS companies with less than $10M in revenue is 20%

Internet sales strategies are the only sales method to see a decline in CAC, dropping from $0.54 to $0.42 between 2014 and 2015

The median average contract length is 1.3 years and the average billing term is seven months in advance in 2016. Comparable to 2015, with average contract length shortening from 1.5 to 1.3 years and average billing period increasing by one month from 2015 to 7 months

Best-in-class SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

Analyzed by contract value, field sales are primarily evident for companies with median deals over $25K. Inside sales strategies are most popular for companies with $1K-$25K median deal sizes

In all SaaS businesses there will likely come a moment where they realize that not all customers are created equal

The very best SAAS companies keep monthly revenue churn at around 0.58%, that’s only about 7% revenue churn a year

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All types of investment have grown, year-on-year, with the biggest growth during the seed stage of financing