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Introduction This primer will guide you through the intricacies of raising debt as an early-stage cashflow-negative SaaS company backed by VC investors. It’s complex, but you’re expected to get the basics as a founder. That’s life for you. In short, two types of loans are available. Working capital loans As a SaaS company with a…
Read more about A VC-Backed SaaS Company’s Debt Primer
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Unsurprisingly, early-stage companies need to be on top of their financials. Reasons for this include tax compliance, shareholder information rights, cash management, and business performance insights. The question is, what is the best approach to achieve this with limited resources? There are a few ways, and they can all be the right thing at the…
Read more about What are the pros and cons for an early-stage company to work with a fractional CFO?
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🤔 How a VC values your early-stage SaaS start-up A typical starting point for a valuation discussion with a VC is its desire to own a particular percentage stake in your SaaS start-up for its investment amount. 👁️🗨️ The VC may tell you: “We are ready to invest €5M for a 20% stake with an…
Read more about Simulation of a VC’s probability-weighted SaaS start-up valuation
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Uthishtan Ranjan, a B2B software investor, published an interesting post on merging two SaaS businesses through an equity swap. It made me reflect and expand on the example. Before reading on, it’s helpful to read Uthishtan’s post first. TLDR; here is the premise of his merger case: […] you are a $20m ARR business growing 40% a…
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Early-stage VC investors are interested in investing if they believe you have a shot at making a one billion exit with them on board as a minority investor. This means you must build a company with an ARR of a hundred million or more within five to eight years, which is possible. Just consider this…
Read more about Capital efficiency of a VC-backed SaaS start-up impacts long-term ownership
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Many founders of small and young companies can surely recognize this dilemma: on the one hand, their company is already a success, with paying customers, and therefore no longer a startup. But, on the other hand, their company’s future is already at risk because it doesn’t have the cash to grow fast enough. Early adopters…
Read more about Three steps towards successfully funding your scale-up growth
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Background In this note, we present the findings from our analysis of 259 Polish software startups that did a seed or a series A venture capital round in the 15 years between 2006 and 2020. Our analysis shows that an increase in VC capital has created more (near) unicorns without necessarily making it easier for…