In this webinar, Founder of SaaSOptics, David Ryan and Investment Director of Lighter Capital, Branden Harper will walk you through: - Why you should track subscription metrics - The 5 principles of SaaS analytics - Key metrics to focus depending on your business models and stages

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Top SaaS Metrics
That Matter to SMB Owners

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Branden Harper
Director of Lighter Capital
+10 years financing early
stage tech companies, either
as an entrepreneur or investor.
Over $50M raised or invested
Today’s Speakers
David Ryan
Founder of SaaSOptics
A serial early-stage
entrepreneur with 20+ years of
experience. Built 8 companies
that span the spectrum of
enterprise and SaaS.

3. LIGHTER CAPITAL WEBINAR © COPYRIGHT 2015
› Founded in 2009
› 150+ SaaS customers
› $880 MM in TTM revenue
Trusted by:
About SaaSOptics

4. LIGHTER CAPITAL WEBINAR © COPYRIGHT 2015
› Mission: make fundraising
process more efficient utilizing
technology and alternative
structures
› Funded +80 tech companies:
Most active revenue-based
finance lender in the country
› $50K-$1M in growth capital,
including making key hires,
product development and
sales/marketing initiatives
› Entrepreneur-aligned structure
About Lighter Capital

5. LIGHTER CAPITAL WEBINAR © COPYRIGHT 2015
Today’sAgenda
Why track subscription metrics?
The 5 Principles of SaaS Analytics
Key metrics you should focus on and how
they apply towards different business models
and stages
p5

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Subscription Metrics & Terminology
The Big 5
MRR
Family
(MRR. CMRR,
ARR/ACV)
Churn CAC
Cohorts CLV

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Why Subscription Metrics?
Reason 1:
Traditional financial
reports don’t tell the whole
story
Reason 2:
For better operating
decisions:
Income
Statement
Balance
Sheet
GAAP
MRR
CLV
Metrics Pricing Packaging
Development Compensation

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The 5 Principles SaaSAnalytics
1. There are no rules
2. You make the rules
3. You must speak “subscription metrics” to speak with the
capital markets
4. Analyze by segmentation
5. Know your subscription business model

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Which ModelAre You
B2C
High Transaction Volume
Low Transaction Price
Unassisted Buying
Click Acceptance
Monthly Credit Card Payments
B2B
Low Transaction Volume
High Transaction Price
Selling
Negotiated Agreement
Checks/ACH/Wires

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Where are you?
Self-Funded
Angel
Investors
Series A
Series B
Series C

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#1 - MRR
‣ MRR= Monthly Recurring Revenue
‣ But, MRR is not “revenue.” It is a “normalized approximation” of revenue
‣ MRR figures into almost all subscription metrics and analysis, so you must
track it granularly and accurately!
‣ Know the elements of your MRR

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MRR Variants
‣ CMRR= Committed Monthly Recurring Revenue
‣ Use when this is a gap between contract execution and subscription start date
‣ B2B Only
‣ ARR= Annual Recurring Revenue and = 12x MRR
‣ B2B Only

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#2 Churn
‣ Churn = what is lost
‣ Customers lost
‣ MRR/ARR lost
‣ Reported in whole numbers
‣ Reported in ratios
‣ Speaks to sustainability and company valuation

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Customer Churn & MRR Drive Valuations!
‣ Average Customer Lifetime Value =
Average MRR X Gross Margin / Customer Churn Rate +
Monthly Discount Rate
‣ Total Lifetime Value = Average Customer Lifetime Value x
Customer Count End of Period

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#3 Cohort
‣ A Cohort is a “like group”
‣ Cohort analysis provides a sense of relative performance across different
groups
‣ In subscriptions, the cohort is usually the month the customer was acquired,
but a cohort can be any meaningful group
‣ Industry can be a cohort!

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#4 Customer Lifetime Value (CLV)
‣ Customer Lifetime Value is the estimated value of your existing Customer
subscriptions.
‣ Average Customer Lifetime Value = (Average MRR X Gross
Margin)/(Customer Churn Rate + Monthly Discount) Rate)
‣ Total Lifetime Value = Average Customer Lifetime Value X Customer Count
End of Period
‣ Grows in importance as your business matures
#5 CustomerAcquisition Cost (CAC)
‣ CAC = Cost of Acquiring a Customer
‣ Works hand-in-hand with CLV
‣ Grows in importance as your business matures

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Which MetricsAre Important When?
Self-Funded
Angel
Investors
Series A
Series B
Series C
Cohort, CAC, CLV
MRR, Churn
B2B

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Which MetricsAre Important When?
Self-Funded
Angel
Investors
Series A
Series B
Series C
Cohort, CAC, CLV
MRR, Churn
B2C

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How Can We Help?
Lighter Capital
Provides $50K-$1M growth funding to
SaaS companies
› Non dilutive
› Long-term growth capital
› Flexible payments
› Can get you funded in 30 days
SaaSOptics
Complete B2B Subscription
Management Software
› Subscription Invoicing
› Revenue recognition and deferred
revenue
› Subscription Analytics
› Subscription Management
Learn more: www.lightercapital.com
Contact us: info@lightercapital.com
Learn more: www.saasoptics.com
Contact us: 678.710.8260