The weekly top 10 for B2B tech operators · Every Friday
ACV, or Annual Contract Value, is one of the most popular metrics in the SaaS world. Chartmogul's article details what it is, how to calculate it, and how to leverage it in your business. Here is some good recent data on ACV within scaled SaaS companies. TLDR, the median ACV is $49K. But not all annual revenue is created equal - check out this analysis by CJ Gustafson
Here is Part 1 of a 3-part Guide to Cash Management for Startups, which highlights bank account strategies at different Stages. The startup phase needs basic checking and savings accounts for operational expenses and emergencies, maintaining liquidity, managing cash flow, and keeping financial controls strict. It prioritizes simplicity and security in banking structures.
I'm sure you see this all the time: options to pay monthly or annually on a SaaS pricing page. This is great for all you non-consumption-based folks out there. It's a really great choice for cash flow, but is it the right option for your business? Jason Lemkin has the low-down.
If you have a services element in your startup, estimating effort, especially in Software projects, is mega hard, and we're all terrible at it. McKinsey found that IT projects are, on average, 45% over budget and 7% over schedule, and the larger a project gets - the worse these stats become. So you should definitely bookmark this series (or share it with the person you know who needs to bookmark it) - Estimating Software Projects by Jacob Kaplan-Moss (and what to do when you mess up).
This is a great article to help you better forecast your subscription growth. It shifts focus from immediate earnings to long-term revenue and uses an excellent walkthrough example to emphasize the importance of understanding retention rates.
The Clouded Judgement newsletter took a look at SaaS revenue multiples this week, and here is the news: Overall, the Public Median is climbing back up and is now at 6.2x (we were at 5.2x this time last year). Public multiples don't have a direct correlation to private multiples, but they are definitely a signal that the direction of private valuations should be trending up. SaaStr covers pre-IPO Multiples well in this article.
(CVC). Back in the good ol' days of '21, Global CVC-backed funding more than doubled ($169.3B). CBInsights has just launched their Global 2023 State of CVC Report (pdf), and it's down, way down. Total deals were down 32% (3,545), and funding dollars were down 46% - roughly in line with declines in the traditional VC market. But - silver linings: CVCs are still very interested in early-stage startups (it's about 2/3 of all capital deployed)
I read a great article earlier this week titled AI won't take your job - someone using AI will...and apparently, companies are also willing to pay a premium for that worker according to this survey by AWS (up to 47% more).
The AI Tech Bro wars are underway. Elon Musk, not happy with how OpenAI is now operating (a for-profit wrapped up in a non-profit entity—similar to Mozilla), has filed a lawsuit against them. But for context, here is the original pitch for OpenAI that Sam Altman sent to Elon. Cynically, OpenAI is concerned that Musk could use the discovery process in the lawsuit to help aid his own artificial intelligence company, xAI.
Moving upmarket into larger organizations is a standard SaaS growth strategy. Increasing ARPU (Average Revenue Per Customer) is good! But there is a lot to learn, and a bunch of time, learning, and effort are required to be successful in this market segment. It's not easy, but it can be done. Here is a great guide from Outreach on breaking into deals over $100k ARR.
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