sutton020

The founder of a portfolio company recently asked me what kind of numbers and other material he'll need when he goes into his next round of fundraising. He wanted to make sure that when he starts talking to new potential investors, he'll have answers ready to most of the questions he'll be asked. That was a great question. By putting together a comprehensive set of data you can pre-empt 90% of the questions which investors will ask you when they assess a potential investment. This has a number of important advantages: It saves you time because you'll have to answer fewer individual questions and requests in a piecemeal fashion. It can speed up the fundraising process dramatically if investors get almost everything they need at once (or almost immediately upon request). It makes you look better, because it shows that you're on top of things. Almost all of the numbers (good) investors ask for are things that you should be highly interested in anyway, since they are im...

Thanks to  Nick Franklin  for reviewing a draft of this post! When I talk to SaaS startups and take a look at their metrics, it still happens quite often that some of the numbers aren’t quite clear to me and it takes some time to clarify things. I’m not referring to sophisticated reports or analyses but to the much more mundane question of what exactly people mean when they use a term like “revenues”. It’s maybe not surprising that there’s sometimes confusion, given that there are several different ways to express revenues of a SaaS company and even more ways to label them: revenues, sales, turnover, MRR, CMRR, ARR, cash inflow, cash-in, billings, bookings, GAAP revenues, income and so on. That said, I believe most SaaS companies can focus on a small number of revenue metrics which aren’t overly complicated. If everyone in the SaaS world can agree on the same nomenclature, I think that will make communication between founders and investors more efficient and will save all of u...