Category: valuation
July 26, 2023 SaaStr : What’s the Average Deal Size for SaaS Companies?
- Public SaaS companies that focus on SMBs have an ACV of about $4,800
- Public SaaS companies that focus on mid-market have an ACV of about $40k
- Public SaaS companies that focus on enterprise have an ACV of about $220k
September 20, 2022 Carta : Early 2022 data shows a drop in median IRR across funds
While all vintages saw median net IRR decline, 2017 and 2020 vintages saw the sharpest drops (of 3.6% and 3.0%, respectively). The lone exception to the decline was 2021 vintage funds, which are still rising from the dip below zero that private-fund IRR usually takes in the initial stages of the fund lifecycle. (read more…)
CATEGORY: resilience, valuation, VC
April 1, 2021 Battery Ventures : Software 2021: The Rise of the Cloud
The median valuation for a public software-as-a-service (SaaS) company in 2010 was three times forward revenue; now the figure is 15 times forward revenue, according to CapIQ data, with many companies trading above 30 times next-12-months revenue. (read more…)
February 8, 2021 Andranik Tumasjana, Reiner Braun, Barbara Stolz in the Journal of Business Venturing : Twitter sentiment as a weak signal in venture capital financing
How do venture capitalists (VCs) incorporate weak and strong signals in the valuation of technology-based startups? Based on a sociocognitive perspective of signaling theory, we introduce Twitter sentiment as a novel and weak signal, which we juxtapose with patents as a traditional, strong signal. While we find a positive association between both signals and VCs' venture valuations, our results reveal that Twitter sentiment does not correlate with actual long-term investment success, whereas patents do. (read more…)
CATEGORY: valuation, VC
June 14, 2020 Jennifer Alsever via Medium : Indie vc: Unicorns Are Out, Profits Are In
But the model is now proving prescient. Over five years, Indie.vc has backed 34 companies — half of which are women-led companies and 20% are Black. And while there haven’t been any big exits yet, the companies that receive Indie.vc funding seem to be much more robust than their peers, especially in a challenging economic climate. On average, they’re growing 100% in the first year, and 300% the second year, says Roberts. Plus, the fund’s mortality rate is 10% — compared to about 44% with traditional VC-backed companies. (read more…)
CATEGORY: customer acquisition, growth, valuation
April 23, 2020 Tech Crunch : How Deal Terms Are Changing Right Now
Meanwhile, the company that was doing so-so is being asked to accept less relaxed arrangements. Among these is taking a lower valuation or, if the company want to avoid one of these down rounds, providing more stock warrants to its investors — contractual rights that enable the investors to increase their position in the future at today’s lower price. Colla says he’s also seeing more companies in this second camp being asked to onerous terms on a more temporary basis, including year-long full-ratchet clauses that ensure that an investor’s shares aren’t diluted in later rounds if the valuation of a company drops. As for the third camp, it’s toast, he suggests. (read more…)
CATEGORY: downturn, valuation, VC
April 10, 2020 SaaS Capital : Private SaaS Company Valuations: Q1 2020 Update
Based on the current public multiple, the average private SaaS would be valued at 5.9 times ARR. However, as outlined in that white paper, there are company-specific value drivers that every operator should consider as they prepare for an equity raise or sale of their company. Listed in order of importance, they are: Growth & Scale of Revenue, Market Size, Revenue Retention, Gross Margin & Revenue Mix, Customer Acquisition Efficiency & Unit Economics, Profitability (read more…)
CATEGORY: alternative financing, SaaS, valuation
March 25, 2020 Tech Crunch : Market players won’t find buyers on the secondary market — yet
Chris Douvos, a longtime investor in venture funds, observes that there’s an “immense amount of capital looking for fund stakes,” meaning from outfits like Industry Ventures and roughly 75 other players in the market. “If I’m a VC right now, I’m wondering when [these] investors — folks who have billions of dollars in committed capital and love to buy fund stakes at 65 cents on the dollar — start capitulating, but that’s like six to nine months out when you really see [these transactions] happen.” (read more…)
CATEGORY: downturn, secondaries, valuation
March 9, 2020 Tytchme : When Exits Go Wrong: The Trados Case Study
The Trados case is a rare window into how VCs manage their portfolio companies when things don’t go as planned. Although the company’s revenues doubled between 2000 and 2005, this was not enough growth for VCs to make significant money on their investment. A sale was deemed a better route to move on and spend their precious time on other deals. Thanks to their sale rights and liquidation preference, investors could time an exit that would not hurt them too badly. (read more…)
CATEGORY: growth, valuation, VC
February 23, 2020 San Francisco Gate : As the startup boom deflates, a reckoning is coming for Silicon Valley
Over the past decade, technology startups grew so quickly that they couldn’t hire people fast enough. Now the layoffs have started coming in droves. Last month, robot pizza startup Zume and car-sharing company Getaround slashed more than 500 jobs. Then DNA testing company 23andMe, logistics startup Flexport, Firefox maker Mozilla and question-and-answer website Quora did their own cuts. (read more…)