Balderton Metrics that Matter in 2023.pdf
2 likes3,455 views
The document discusses the changing landscape of unicorn startups, emphasizing the importance of cash flow and efficiency metrics such as ARR growth and customer acquisition costs in the current financial environment. It features insights from industry experts and resources for understanding SaaS financial performance and growth strategies. Overall, the focus is on the criticality of managing finances effectively to thrive amidst the challenges in the market.
Balderton Metrics that Matter in 2023.pdf
- 2. 10x is the new 20x Unicorns are rare again Source: D.A. Davidson, The Herd P2P is the new growth
- 3. “Bank run” took on an old, new meaning Runway extension was already in focus: flat is the new up (Too soon?) https://twitter.com/tomloverro/status/1620466827519496194
- 4. “All companies that go out of business do so for the same reason – they run out of money.” -- Don Valentine Valentine was a quote machine, see here for a taste: https://somethingventured.com/2007/11/wisdoms-of-sequ/ See here for a 75-page interview, part of an oral history of Silicon Valley: https://digitalassets.lib.berkeley.edu/roho/ucb/text/valentine_donald.pdf
- 5. • – – – – • – • – – See Balderton webinar on growth/burn: https://www.balderton.com/wp-content/uploads/2022/12/Growth-and-burn-upload-2.pdf See this post which predicts recovery to be more slog than blip https://buckonsoftware.substack.com/p/the-software-slog
- 6. • ARR growth • Free cashflow margin • Rule of 40 score • Subscription gross margin • Burn multiple • ARR/FTE • CAC ratio • CAC payback period • NRR (net retention rate) • GRR (gross retention rate) = matters now, more, or earlier as a result of the new environment Metric • Are you an interesting investment? • At what rate do you generate free cashflow? • What’s your balance of growth and cashflow? • How efficiently do you run the service? • How efficiently do you build the ARR base? • What’s your ARR productivity per head? • How much do you spend to acquire a $1 of new ARR? • How long does it take to get that paid back? • What happens to customers, once acquired (net)? • What happens, gross (before expansion)? Question it answers
- 8. • – • – • – – • 6.5x 5.5x 5.2x 7.8x 8.7x 82 SaaS FCF < -15% FCF < 0% FCF > 0% FCF > 15% 0.36 0.44 0.38 0.46 0.65 82 SaaS FCF > 15% FCF < 0% FCF < -15% FCF > 0%
- 9. The Potential To Do This The Progression Towards There
- 10. • • • • • – – – • * Some people (e.g., Meritech) calculate R40 score for public companies using implied ARR growth instead. Source: Meritech Benchmarks
- 11. • • • • – – – • Source: RevOps^2 SaaS Benchmarks 2022
- 14. • • • – – – • – – – Source: RevOps^2 SaaS Benchmarks 2022
- 15. • • – • • – –
- 17. • • • – • • –
- 18. • • • • • •
- 19. SaaS Business ● General and go-to-market ○ SaaStr (Jason Lemkin) ○ Kellblog (Dave Kellogg) ○ Tomasz Tunguz ○ Next Big Teng (Janelle Teng) ○ Scaling to $100M (BVP) ○ Breaking SaaS (Thomas Robb) ● Sales performance ○ Balderton Founder’s Guide to B2B Sales ○ Benchsights (David Spitz) ○ RepVue (Twitter) SaaS Financial (including metrics) ● Private companies ○ RevOps^2 (Ray Rike) ○ KeyBanc SaaS report ○ OpexEngine ● Public companies ○ Meritech public comparables ○ Clouded Judgement (Jamin Ball) ○ Meritech S-1 breakdowns (Alex Clayton) ● CFOs on SaaS ○ OnlyCFO ○ The SaaS CFO (Ben Murray)
- 23. Excerpted from this OnlyCFO SaaS World blog post
- 24. Growth predicting multiple better than R40
- 25. RevOps Squared showing ARR/FTE for private companies as strongly a function of size
- 26. ChartMogul example of a detailed cohort analysis See here