Fresh Insights

Analyses, Musings & Observations

SaaS performs well in a recession

SaaS Capital, a lender to software businesses, put out an excellent research piece which examined the performance of publicly traded SaaS businesses during the recession.  The 3 page research report is well worth the read, and we decided to summarize some of the findings. Below is the data and under that are observations.   The…
Read More

Starting a consumer products business

Recently we spoke to Austin Eudaly, founder of Tom & Sheri’s Products, Inc. which produces a premium wrinkle releaser spray for clothing for consumers.  Founded in Dallas where the company also does the bottling, Tom & Sheri’s is off to a strong start. Austin shared with us his experience and insight in starting an ecommerce/CPG…
Read More

An Investment Banker’s view of the SaaS Market

Software Equity Group just released their quarterly view of the SaaS market.  SEG is a well respected M&A advisory firm and investment bank, and their quarterly review of the SaaS market is well worth the read.  Below are the key take-aways from the report:   Growth continues to be strong.  The median revenue of the…
Read More

Consumer tech multiples came in

We follow 59 publicly traded internet companies in different industries including social media, marketplaces, content distribution, gaming, ecommerce, payments, and new hardware.  The one thing these companies all have in common is that consumers are a customer/critical constituent in the business model. Given the diversity of industries, the multiples vary.  Below is the data along…
Read More

The best lessons from the tech bubble

Recently I read “Once You’re Lucky, Twice You’re Good” by Sarah Lacy.  It’s a fantastic book about the re-emergence of Silicon Valley after the tech bubble in 2001.  The book is well worth a full read and I highly recommend it.  Below are snippets of the book we found most informative. MySpace was sold too…
Read More

Yahoo’s Mistakes

Recently I read Nicholas Carlson’s fantastic book on Yahoo entitled “Marissa Mayer and The Fight to Save Yahoo.”  Below I have paraphrased what I found to be valuable sections – the full book is definitely worth the read and there are a lot of learnings on what to do and what not do when growing…
Read More

Negotiating with your VC – part 2

Below is a continuation of a recent blog post about a book called Never Split the Difference by Chris Voss.  Chris was one of the premiere FBI Hostage Negotiators in the world, and his tactics could be useful for negotiating with customers, vendors, and of course your VC.  The original blog we wrote highlighted some…
Read More

Negotiating with your VC

I just read a book called Never Split the Difference by Chris Voss.  Chris was one of the premiere FBI Hostage Negotiators in the world, and his tactics could be useful for negotiating with customers, vendors, and of course your VC.  Excerpts from the book are below.   Create warmth by using first names.  “I’m…
Read More

The 12 commandments of customer success

We’ve had the good fortune of learning from and investing in SaaS businesses with excellent customer retention and upsells. Below are some of the key learnings we’ve gathered over time.   The Customer Success Team is not the only group in charge of customer success.  Preventing churn is everybody’s job, so your engineers should talk…
Read More

SaaS valuations fall to 8x+, but are still high

Valuations for SaaS came down in July, but are still high: of the 76 SaaS companies we follow, the average public SaaS business is trading at 9.25x revenue while the median is 8.31x.  The data is below.     Negative EBITDA, positive cash flow.  The median SaaS business had trailing twelve month revenue of $314mm,…
Read More