Over the last decade, private companies, in the areas of SaaS and Marketing as well as venture capital firms have been firmly focused on essentially one set of metrics: Drivers of Growth. Growth in customers, annual recurring revenue (ARR), pricing and retention had become almost exclusively the drivers of value. Venture firms have focused on total addressable market (TAM) and the assessment of a management team to successfully execute on a roadmap to achieve growth. Economies of scale have, over the years, always been believed to be the holy grail for growth companies. It has not been that profitability didn’t matter; but rather such profitability could readily take a back seat (in fact sometimes even in the proverbial trunk!) so long as growth was achieved, and preferably accelerated growth (often without regard to the cost of such growth).

Public market valuations reflect real-time information and have high data integrity because they include a wide array of companies and are based on audited financial statements. Public valuation data is the primary starting point for valuation analysis by both buyers and sellers. One key valuation index is one developed by SaaS Capital – aptly called The SaaS Capital Index. The index represents pure B2B SaaS companies, and specifically excludes companies like LinkedIn (when public), PayPal, Carbonite, and Dropbox. The index also excludes legacy and conglomerate software vendors such as Microsoft and Oracle, who have a mix of perpetual and SaaS revenue.

The last decade and a half (really since the Great Financial crisis of 2008) has brought many challenges to businesses worldwide; amongst perhaps the most salient: maturing economies, low growth and, in turn, deflation and negative real rates of return most everywhere. The Covid crisis has unfortunately aggravated and perpetuated this reality. Virtually the only games in town over the past five years or so which offer a decent investment return over and above the rate of inflation: Equities and (perhaps unbelievably), Crypto. 

Inflation has been a popular topic of conversation lately, and rightly so. Over the last few weeks prices of various raw materials and commodities have surged and show no signs of slowing down.

It’s difficult to imagine that after a solid year (and then some) of a raging global pandemic, lockdowns and, in some cases, outright shutdowns, an economic boom could be waiting around the corner. But that’s exactly what history tells us is likely in store for 2021.

Given the unparalleled amount of “dry powder” currently held by Venture Capital and Private Equity firms (investors put more than €1 trillion to work in Europe's M&A market during 2020 alone for the fifth year running) many companies in the marketing tech and services industry are, for the first time, being inundated with cold outreach from prospective buyers (or their bankers).

Despite widespread fear that venture-capital investment would dry up, deal activity fell just 6% in the first half of 2020, compared with the same period of 2019.

Cash Flow from Operations (“CFO”), found on the Cash Flow Statement, can be a powerful number to analyze the historical performance of a business. It can also provide valuable insights for future decision making, especially when combined with other financial data and used in various financial ratio calculations.

It's critical to have a financial lead and infrastructure that supports the size, goals, and challenges your business is facing.  Controller? Bookkeeper? Accounting Manager? Financial Analyst? CFO? What’s the difference? Should you hire internally or outsource externally? Full-time? Part-time?

To answer these questions, and because all organizations have different financial needs, it’s important to understand the differences among roles and match them to the needs of your business, currently, and in the future. Broadly speaking, financial roles can be separated into two simple categories: backward and forward looking.

While small businesses are especially vulnerable to the financial impact of the coronavirus, organizations of all sizes are trying to stay on top of the changing economic landscape. Whether you’re battling beyond pandemic paralysis, or you’re arming yourself with information “just in case," here are 3 financial tips to help you manage cash flow: