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Software-as-a-Service
Software-as-a-service (Saas) is a business model were recurring licenses are sold that run on relatively low marginal costs. In combination with fast growth, Saas makes up one of the favorite investment categories for tech investors.
Saas companies typically operate on a set of specific KPIs and under a specific set of reporting elements. Investors in Saas businesses are keen to quickly understand industry specific metrics such as ARR/MRR, backlog, and cohort analysis to evaluate their investment opportunities.
Especially in anticipation of financing or merger events, it pays to have your record-to-report process set-up along the best market practises and to have your investment narrative carefully crafted. Combining 50+ years experience in managing the finances of Saas businesses, our experts can help you effectively.
Case: supporting a Saas business in fundraising
We recently helped a SaaS business prepare for external funding by strengthening their financial foundation and investor readiness. In this instance we followed a methodological approach that covered:
Strategic
- Clarifying the investment story: we crafted a clear and compelling investment narrative, making it easier for potential investors to understand the business’s value proposition.
- Validating investor appetite: understanding that we can’t oversee the whole financing market independently, we facilitated exploratory calls between the company management, its shareholders, and outside investors in our network to assess market appetite and further shape the positioning of the future fundraising round.
- Building a financial narrative: we developed a simple, transparent story around historical financials—explaining what drove past growth and what caused any slowdowns—giving context and credibility to the numbers.
As to the projections, we looked for a combination of historic proof and future market share that could reasonably be gained.
Operational
- Improving the record-to-report process: we restructured financial reporting to match what SaaS investors expect—making metrics more intuitive and comparable. The reporting framework was enhanced to ensure that the financial data used in fundraising materials could stand up to investor due diligence.
- Closing prior-year financial statements: we finalized the previous year’s financials based on the improved reporting process, ensuring consistency, audit-readiness and compliance with Dutch GAAP reporting standards.
- Setting up the dataroom: we organized a professional, investor-ready dataroom to support a smooth due diligence process.
Closing
- Flexible captable: we built a flexible cap table aligned with all historical financing rounds and underlying notarial deeds, ensuring clarity during negotiation and alignment with investor requirements.
- Deal assistance: during the negotiation phase our expert was on-call to make changes, adjust liquidity waterfalls, and calculate the impact of different scenarios to existing shareholders.
These efforts might seem independent – yet in fact they are closely related. Their concerted execution maximizes the chances to achieve a smooth financing process with the maximum outcome.
Interested how we can help your Saas business? We’re always open for a first conversation.