When I worked in venture capital, I was lucky enough to have the opportunity to invest in some really great companies during their early rounds. Now some of those companies are going public, and I find myself spending some time thinking about when to sell my stock in these companies.
I don’t think anyone has truly figured out the formula to value these companies. There just aren’t enough examples of SaaS companies that have reached maturity and shown us what they really look like in the long term. Salesforce still grows at 23% annually and trades at over 100x EBITDA!
Nonetheless, I thought it’d be an honest exercise for me to write some thoughts down and then review them in a few years.
I think that growth should be the number one factor in considering SaaS valuations (when I say valuation, I mean how much is the company worth on a revenue/gross profit/EBITDA/FCF multiple basis). If a company can grow at 50% for 3 years, it’s topline will be nearly 3.4x higher! That’s powerful.
If you’re a real SaaS company, this means you have 80+% gross margins and should start seeing nearly 40 cents/dollar of new revenue start to fall down to operating cash flows. Assuming the company that grows at 50% annually was cash flow breakeven, that means your operating cash flow in three years is more than your current revenues.
No two companies are the same. The top factors that would effect valuation are how scalable growth is (sales/marketing channels and economics), how long growth can go for (market size, competition), churn (and how it contributes to growth), and margin profile (gross and net), barriers to entry (that will protect current revenues and make sure new competition doesn’t chip into existing growth prospects)…there are some other things pretty important too, like management’s incentive system.
I think what a lot of investors have figured out is that if a company keeps growing, you can pay through the nose (relative to what most companies trade at) and still make a nice IRR. I agree that growth is the most important aspect of valuation, and that most of the other factors are basically contributors to growth. Even in these heady times of crazy valuations, I’d say that a lot of the public companies are undervalued! The other main factor here is the margin profile. If you can’t ever be profitable, then forget it. And, in the case SaaS companies, it’s more like you have to be VERY profitable.
I don’t have time to look up various rules on making stock predictions for companies you own. So, I’ll leave you with this very basic spreadsheet (SaaS valuations thoughts) that should illustrate that growth is key in valuation and how I think various companies should be valued (although I guess the numbers in blue are very much up to interpretation in most companies). Enjoy.
interesting review. As well visit the main site
to experience slot pulsa. This page has received discovery from judi slot bets opponents in Dalam negeri.
Truth be told there are actually loads of elegant promos in case you join today.
Hello there! I know this is kinda off topic but I was wondering which blog platform are you using for this
site? I’m getting sick and tired of WordPress because I’ve had issues with hackers and I’m looking at options for another platform.
I would be great if you could point me in the direction of a good platform.
Pretty! This has been a really wonderful post.
Thank you for providing these details.
Excellent post! We are linking to this particularly great post on our website.
Keep up the great writing.
It’s enormous that you are getting thoughts from this piece of writing
as well as from our dialogue made here.
Hello there! Quick question that’s totally off topic.
Do you know how to make your site mobile friendly? My blog looks weird when browsing from my iphone 4.
I’m trying to find a theme or plugin that might be able to correct this problem.
If you have any recommendations, please share. Thank
you!
We stumbled over here coming from a different website and thought I might as well check things out.
I like what I see so i am just following you. Look forward to going over your web page repeatedly.
Today, I went to the beach front with my children. I found a sea shell
and gave it to my 4 year old daughter and said “You can hear the ocean if you put this to your ear.”
She put the shell to her ear and screamed.
There was a hermit crab inside and it pinched her
ear. She never wants to go back! LoL I know this is
entirely off topic but I had to tell someone!
Very good info. Lucky me I discovered your site by
chance (stumbleupon). I have book marked it for later!
Very soon this web page will be famous amid all blogging and site-building people, due to it’s
fastidious content
What’s Going down i’m new to this, I stumbled upon this I’ve found It positively helpful and it
has aided me out loads. I’m hoping to contribute
& help other users like its helped me. Good job.
Wonderful work! This is the type of information that should
be shared across the net. Disgrace on Google for no longer positioning this put up higher!
Come on over and discuss with my website . Thanks =)
When I initially left a comment I seem to have clicked the -Notify me when new comments are added- checkbox and now every time a comment
is added I get four emails with the same comment. Is
there a way you are able to remove me from
that service? Thank you!
Peculiar article, exactly what I needed.
Hey There. I found your weblog using msn. This is a really
well written article. I will be sure to bookmark
it and come back to learn more of your helpful information. Thank you
for the post. I will definitely comeback.
Touche. Great arguments. Keep up the good effort.
Excellent web site you have here.. It’s difficult to find quality writing like yours these days.
I truly appreciate people like you! Take care!!
Greetings from Carolina! I’m bored to tears at work so I decided to check out your site on my iphone during lunch break.
I really like the info you present here and can’t wait to take a look when I get home.
I’m shocked at how fast your blog loaded on my mobile ..
I’m not even using WIFI, just 3G .. Anyhow, great blog!
Auf der Rückseite befindet sich zumeist ein zusätzlicher Text, der für steuerliche Aspekte eine wichtige rolle spielt.
Die Gastronomie-Bon Rolle kann nur in Wirtsbetrieben Verwendung
finden und ist für andere Lokalanbieter, wie Kioske und Tankstellen uninteressant.
Der Vorteil besteht darin, dass der Wirt keinen zusätzlichen steuerrelevanten Text erfassen muss, dieser wird
bei den meisten Rollen direkt bei der Produktion mitgedruckt.
Bei den zweilagigen Rollen handelt es sich um ein Blatt mit
einem hinteren Durchschlag, wobei ein Beleg für den Kunden und
einer für den Geschäftsinhaber gedacht ist.
Für diese Art von Rolle benötigt man einen speziellen Drucker mit Farbnadel.
Hierneben an der Zeit sein einen speziellen Fachmarkt aufsuchen, der diese Art von Rolle noch verkauft.
Gerade, wenn man jeweils ein Rechnungsexemplar ohne fremde Hilfe selber und einen für
den Kunden benötigt, so ist ein einsamer einmalige Erfassung notwendig.
Beim Ticket Bon handelt es sich um festeres bzw.
dickeres Papier, welches zum Druck von Tickets besonders gut geeignet sind.
Gerade Tickets weißen einen höheren Verschleiß auf und weisen somit ein stabileres Papier aus.
excellent publish, very informative. I wonder why the opposite experts of this sector don’t understand this.
You should continue your writing. I’m sure, you have a great
readers’ base already!
I am curious to find out what blog platform you are utilizing?
I’m having some minor security problems with my latest website and I’d like to find something more safeguarded.
Do you have any solutions?
When someone writes an paragraph he/she retains the image
of a user in his/her mind that how a user can understand it.
So that’s why this post is perfect. Thanks!
Heya i’m for the first time here. I came across this board and I find It really useful & it helped me out a lot.
I hope to give something back and help others like you
helped me.
Hi, I do think this is a great website. I stumbledupon it 😉 I
will return once again since I bookmarked it.
Money and freedom is the best way to change, may you be rich and continue to help others.
Excellent blog! Do you have any helpful hints for aspiring writers?
I’m planning to start my own site soon but I’m a little lost on everything.
Would you recommend starting with a free platform like WordPress or go for a paid
option? There are so many choices out there that I’m completely confused ..
Any ideas? Thanks!
I want to to thank you for this good read!! I definitely loved
every bit of it. I have got you book marked to look at new stuff you post…
Unsere Kunden profitieren beim Fenster kaufen von einigen Vorteilen. Sie erhalten Qualität Made in Germany zu fairen Konditionen und bei Großbestellungen mit einem adäquaten Rabatt.
Ohne lange Wartezeiten liefern wir zuverlässig, sowie ohne zusätzliche Versandkosten an Sie aus.
Sie können in unserem Fensterkonfigurator außerdem Profilsysteme reich
an Dekorfolien wählen. Wir fertigen hochwertige Energiesparfenster aus Fensterprofilen von Kömmerling und Aluplast.
Gerne erhalten auch auf Wunsch ein Angebot zu Alu Fenstern. In verschiedenen Farben und Holzoptiken stellen Sie sich so Ihr
Wunschfenster zusammen. Wenn Sie neue Fenster benötigen, können Sie auch ungewöhnliche Maße bei uns konfigurieren. Auf Ihre Bestellung müssen Sie schnell bei der Hand sein, da wir selbst PVC-Fenster mit Dekor innerhalb von sechs Wochen ausliefern und Ihnen sowohl die Bezahlung per Vorkasse
mit Skonto, als auch den Rechnungskauf versichern. Obendrein vermitteln wir Montagedienstleister,
die ihr Handwerk verstehen und deren Sie Ihre neuen Fenster und Türen professionell einbauen zählen. Alle Materialien wie spezielle Verglasungen zum Schallschutz zum konfigurieren von schalldichten Fenstern, Einbruchschutz Fenster mit besonderen Beschlägen oder
Fensterzubehör können Sie mit wenigen Klicks auswählen. Im Fensterkonfigurator stellen Sie
Ihr Wunschfenster zusammen. Probieren Sie es aus!
Sie haben noch Fragen? Nutzen Sie unseren Rückrufbutton. Wir beraten Sie
gerne.
Hey there! I realize this is somewhat off-topic but I had
to ask. Does operating a well-established
website like yours require a massive amount work? I am brand new to blogging but I do write in my diary everyday.
I’d like to start a blog so I will be able to share my experience and thoughts
online. Please let me know if you have any kind of recommendations or
tips for new aspiring blog owners. Thankyou!
Hi there! This post could not be written any better!
Reading through this post reminds me of my good old room mate!
He always kept chatting about this. I will forward this page to him.
Fairly certain he will have a good read. Many thanks for
sharing!
A fascinating discussion is worth comment. There’s no
doubt that that you should write more on this topic, it
may not be a taboo subject but usually people don’t speak about such
subjects. To the next! Best wishes!!
What’s up it’s me, I am also visiting this web page regularly, this web site is in fact fastidious
and the visitors are genuinely sharing pleasant thoughts.
This design is steller! You obviously know how to keep a reader entertained.
Between your wit and your videos, I was almost moved to start
my own blog (well, almost…HaHa!) Wonderful
job. I really loved what you had to say, and more than that, how you presented
it. Too cool!
Hello, i think that i saw you visited my web site thus i came to “return the favorâ€.I’m trying to find things to enhance my site!I suppose its ok
to use some of your ideas!!
This is very interesting, You are a very skilled blogger. I’ve joined your rss feed and look forward to
seeking more of your magnificent post. Also, I’ve shared your website in my
social networks!
Hey there! I know this is kinda off topic nevertheless I’d
figured I’d ask. Would you be interested in exchanging
links or maybe guest writing a blog post or vice-versa?
My site discusses a lot of the same subjects as yours
and I believe we could greatly benefit from each other.
If you happen to be interested feel free to shoot me an e-mail.
I look forward to hearing from you! Fantastic blog by the way!
I am extremely inspired with your writing abilities
and also with the layout for your weblog. Is that this a paid subject or did you customize
it yourself? Anyway stay up the excellent high quality writing, it’s
rare to see a nice weblog like this one these days..
I am really impressed with your writing skills as well as with the layout on your blog.
Is this a paid theme or did you customize it yourself?
Anyway keep up the excellent quality writing, it is
rare to see a great blog like this one these days.
Magnificent site. Plenty of helpful information here.
I’m sending it to several pals ans additionally sharing in delicious.
And obviously, thank you to your sweat!
It’s appropriate time to make a few plans for the future and it is time to be happy.
I have learn this put up and if I may I want to counsel you few attention-grabbing things or advice.
Perhaps you could write subsequent articles referring to this article.
I wish to learn more things approximately it!
Unsere Kunden profitieren beim Fenster kaufen von einigen Vorteilen. Sie erhalten Qualität
Made in Germany zu fairen Konditionen und bei Großbestellungen mit einem adäquaten Rabatt.
Ohne lange Wartezeiten liefern wir zuverlässig, sowie ohne zusätzliche Versandkosten an Sie aus.
Sie können in unserem Fensterkonfigurator außerdem Profilsysteme
gesegnet mit Dekorfolien wählen. Wir fertigen hochwertige Energiesparfenster aus Fensterprofilen von Kömmerling und Aluplast.
Gerne erhalten auch auf Bitte ein Angebot zu Alu Fenstern. In verschiedenen Farben und Holzoptiken stellen Sie sich so Ihr Wunschfenster
zusammen. Wenn Sie neue Fenster benötigen, können Sie auch ungewöhnliche Maße hierzulande konfigurieren. Auf Ihre Bestellung müssen Sie
schnell bei der Hand sein, da wir selbst PVC-Fenster mit Dekor innerhalb von sechs Wochen ausliefern und Ihnen sowohl die Bezahlung per
Vorkasse mit Skonto, als auch den Rechnungskauf versichern. Inter alia vermitteln wir Montagedienstleister, die ihr
Handwerk verstehen und von denen Sie Ihre neuen Fenster und Türen professionell einbauen gehen. Alle Materialien wie spezielle Verglasungen zum Schallschutz zum konfigurieren von schalldichten Fenstern, Einbruchschutz
Fenster mit besonderen Beschlägen oder Fensterzubehör können Sie mit wenigen Klicks
auswählen. Im Fensterkonfigurator stellen Sie Ihr Wunschfenster zusammen. Probieren Sie
es aus! Sie haben noch Fragen? Nutzen Sie unseren Rückrufbutton. Wir beraten Sie
gerne.
Auf der Rückseite befindet sich zumeist ein zusätzlicher Text, der
für steuerliche Aspekte eine zentrale Rolle spielt.
Die Gastronomie-Bon Rolle kann nur in Wirtsbetrieben verwendet
werden und ist für andere Lokalanbieter, wie Kioske und Tankstellen uninteressant.
Der Vorteil besteht darin, dass der Wirt keinen zusätzlichen steuerrelevanten Text
erfassen muss, dieser wird bei den meisten Rollen direkt bei der Produktion mitgedruckt.
Bei den zweilagigen Rollen handelt es sich um ein Blatt mit einem
hinteren Durchschlag, wobei ein Beleg für den Kunden und
einer für den Geschäftsinhaber gedacht ist. Für diese Art von Rolle benötigt man einen speziellen Drucker mit
Farbnadel. Zumal an der Zeit sein einen speziellen Fachmarkt aufsuchen,
der diese Art von Rolle noch verkauft. Gerade, wenn man jeweils ein Rechnungsexemplar im
Alleingang selber und einen für den Kunden benötigt, so ist nur eine einmalige Erfassung notwendig.
Bei dem Ticket Bon handelt es sich um festeres bzw.
dickeres Papier, welches zum Druck von Tickets besonders gut geeignet sind.
Gerade Tickets weißen einen höheren Verschleiß auf und weisen somit ein stabileres Papier
aus.
Howdy very cool site!! Man .. Beautiful .. Wonderful ..
I will bookmark your blog and take the feeds additionally?
I am glad to find so many useful information here in the post, we need work out extra techniques in this regard,
thank you for sharing. . . . . .
It’s hard to come by knowledgeable people about this topic, however, you sound like you know what you’re talking about!
Thanks
Hi there! Do you know if they make any plugins to help with
Search Engine Optimization? I’m trying to get
my blog to rank for some targeted keywords but I’m not seeing very good success.
If you know of any please share. Many thanks!
Great blog you’ve got here.. It’s hard to find good quality writing like yours these days.
I honestly appreciate individuals like you! Take care!!
Wow, amazing blog layout! How long have you been blogging for?
you make blogging look easy. The overall look of your website is
fantastic, let alone the content!
Hmm is anyone else experiencing problems with the images on this blog loading?
I’m trying to figure out if its a problem on my end or if
it’s the blog. Any responses would be greatly appreciated.
Hi! This is my first visit to your blog! We are a team of volunteers and starting a new project in a community in the same niche.
Your blog provided us beneficial information to
work on. You have done a wonderful job!
I am sure this article has touched all the internet users, its really really
nice article on building up new website.
Woah! I’m really digging the template/theme of this blog.
It’s simple, yet effective. A lot of times it’s difficult to get that “perfect balance” between usability and visual appeal.
I must say you have done a very good job with this. In addition, the blog loads very quick for me on Firefox.
Exceptional Blog!