This document provides an agenda and introduction for a presentation by Mark MacLeod on scaling SMB SaaS companies. The agenda includes sections on the SME market, scaling challenges, and strategies for scaling. An introduction to Mark MacLeod notes his experience as CFO for several companies and as a venture capital partner. The document also outlines SurePath Capital's purpose in helping SaaS and commerce companies with growth funding, strategic guidance, and exits. Examples of recent deals SurePath has worked on are listed.

1. M A R K M A C L E O D , @ S TA R T U P C F O
S C A L I N G S M B S A A S

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A g e n d a
Introduction
The SME Market
Scaling Challenges
Scaling Strategies & Lessons
01
02
03
04

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I n t r o d u c t i o n
M A R K M A C L E O D
F O U N D E R & P R E S I D E N T
S U R E PAT H C A P I TA L PA R T N E R S
Mark has over 14 years experience as a CFO for leading companies such as FreshBooks,
Shopify, Tungle and many others. He also spent 3 years as a General Partner at Real Ventures,
Canada’s largest and most active seed stage venture fund.
He has raised hundreds of millions in capital from investors in Canada, the US and Asia. In
addition, Mark has sold companies to Airbnb, Blackberry, Rackable Systems, Return Path and
others.

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S u r e P a t h : O u r P u r p o s e
Helping fund, grow and exit SaaS and commerce companies
The process of raising growth capital is very different from raising early stage capital
It is cheaper than ever to start companies, but more expensive than ever to build market leaders. If that’s your
aspiration, you need growth capital
We help startups prepare for growth stage and help them raise the capital needed to become market leaders
We have sat on both sides of the table. We have funded, grown and exited many companies
We offer up that experience through ongoing coaching and mentoring.
A low touch, high impact way to help you grow
There are few credible choices for advisors to facilitate sub $100M exits. We fill that gap
We work with you to facilitate the BD and Corp Dev intros that pave the way to an eventual exit
If you decide to exit, we manage the process for you from start to finish
SurePath maximizes your optionality:
We make sure you know what it takes to build a market leader and capitalize you towards that goal.
We ensure you are always in the minds of strategic buyers so that if they decide to make a move in your
space, you are in the conversation. You can then decide; Keep going or exit?
Growth
Funding
Strategic
Guidance
Exits
Toronto San Francisco

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in its Series B financing from
served as the exclusive strategic and
financial advisor to
5
R e c e n t D e a l s
in its Series B financing from
served as the exclusive strategic and
financial advisor to
in its Series A financing from
served as the exclusive strategic and
financial advisor to
on its sale to
served as the exclusive strategic and
financial advisor toserved as advisor to

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S u r e P a t h & S M E
•We have been part of some the most successful SME SaaS companies
•We have deep relationships with SME investors and buyers
•SurePath is committed to becoming the leading strategic financial advisor to the global
SME software market

7. Why SME?

8. 0-10 employees
27 million
91%
T h e S M E M a r k e t
Source: US Census, US Small Business Administration
400K new business establishments are opened every quarter in the United States.
SMEs account for 99.9% of businesses, and 56% of the workforce.
11-100 employees
1.7 million
6%
100+ employees
1 million
3%

9. S M E M a r k e t Tr e n d s
A change in
the nature of
work
Younger
entrepreneurs
There is always
room for new
players & for
exits

10. Scaling Challenges in SME
SaaS

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F r o m M r. S a a S ( t r )

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C h u r n = G r a v i t y !

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B e s t i n C l a s s U n i t E c o n o m i c s
48 months
2%/ month (logo)/ -1% (rev)
1/4 of LTV
4x
Tenure
Churn
CAC
LTV/CAC

14. Scaling Strategies in SME
SaaS
To update picture

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S t r a t e g i e s f o r S c a l i n g S M E S a a S
Leverage a low CAC
Freemium
Cross-sell multiple products
Build a channel
Love your customers!
Add Payments
Segment for success
01
02
03
04
05
06
07

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S t r a t e g y 1 : L o w C o s t o f A c q u i s i t i o n
Grow by creating viral hooks in your product

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S t r a t e g y 2 : F r e e m i u m
1 2
Totally Free
Monetize Through Ads
Free Base Product
Premium Upsell
Pre-requisites for freemium: Large market, incremental cost to serve near zero, differentiated premium
offering to drive conversion

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S t r a t e g y 3 : C r o s s - s e l l P r o d u c t s
Cross-selling products to drive up ARPU and ensure greater reliance on your platform

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S t r a t e g y 4 : B u i l d a C h a n n e l
Going direct to end customer only goes so far - building a channel network facilitates long-term growth

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S t r a t e g y 5 : G i v e G r e a t C u s t o m e r S u p p o r t
Good customer support drives higher NPS and organic growth

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S t r a t e g y 6 : A d d P a y m e n t s
Adding payments creates an opportunity to be further integrated with the customer’s business
$45m
$53m
$70m $73m
$87m
$100m
$130m $127m
$152m
$0m
$20m
$40m
$60m
$80m
$100m
$120m
$140m
$160m
Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017
Shopify Revenue
Merchant Solutions Subscription Solutions

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S t r a t e g y 7 : S e g m e n t a t i o n
The SME market is too broad - you need to build for specific verticals and case personas

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K e y I n s i g h t s f r o m S c a l i n g S M E S a a S
1 2
3 4
Merchants Have No Time Growing FAST is expensive
NPS is Key Help your customers grow
• AI solutions that leverage
existing content or do-it-for-me
type tools win out against
complicated do-it-yourself tools
• There is a peak natural growth
rate to most product categories.
Growing faster than this can be
expensive
• SMEs talk to each other! A good
net promoter score goes a long
way. Aim for 65 or more
• Products that help SMEs make
revenue always win out against
products that save time for SMEs

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G r e a t T h i n g s Ta k e T i m e
1999 2001 2003 20041996
• Successful companies that scale in the SME SaaS space are not made overnight - many
took decades to grow its user base, brand presence, and ecosystem in order to create a
defensible moat in the space
• Shopify took over a decade to IPO - while most others still remain privately owned

25. Mark MacLeod
Founder & President
mark@surepathcapital.com
416.843.6004
@startupcfo
@surepathcap