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The Fundraising Market is Stable, Despite Public Market Fluctuations. The dollars in and out of the venture market are relatively constant. LPs are investing into venture capital at a steady, and likely increasing rate. Over the last five years, dollars into the venture industry has remained at or below the 12 year median. 2014 looks to be a bit of a stronger year. VCs are investing at a relatively constant pace and at a relatively constant average dollars per investment. The public market correction in consumer and enterprise stocks in February was real and significant, deflating consumer by 25% and enterprise by 40%+. Many of those companies have rebounded some since the lows, but institutional investors have broadly cycled from growth to value stocks. Valuations may be more varied but total capital invested in startups is constant.

Tomasz Tonguz

More SaaS + Software Stats

The median annual unit churn for SAAS companies was 10% in 2016

If you are charging $500 per month, you can afford to spend up to 12x that amount (i.e. $6,000) on acquiring a new customer

Three uses for the SaaS Guidelines

Is your SaaS business viable?

Companies with longer contracts (2+ years) reported the lowest annual unit churn

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

Growing faster has twice as much impact on share price as improving margins

26% of SAAS companies with at least $15MM in GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher.

Japanese company Hitachi accounted for three percent of the world’s market for diagnostic imaging in 2017.

Net-revenue churn improves with larger Average Contract Value (ACV), likely due to more structural churn among SMB customers and higher switching costs associated with larger contracts

More Growth Strategy Stats

SaaS IPOs have more than doubled over the last 12 years

At Twitter, 10 percent of tech roles are staffed by women

Sony’s PlayStation brand had accumulated approximately 38.57 million fans on the social network

The median cost for a SaaS company to acquire a dollar of new customer revenue is $1.18

The median startup spends 92% of first year revenue on customer acquisition, taking 11-months to payback their Customer Acquisition Cost

How Often Should The Pricing Committee Be Meeting And Making Changes?

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%”

The 2015 median revenue growth rate was 44%, while the median projected growth rate for 2016 is 48%

Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate

Companies that spend more on sales and marketing (as a % of revenue) generally grew at a faster rate than those that spent less