[Updated 5/1/18 to add net new ARR, LTV/CAC, and both customer and employee NPS.]
In the course of my board and advisory work, I get to look at a lot of software as a service (SaaS) startups financials and I’m often surprised how people choose to present their companies.
Because people — e.g., venture capital (VC) investors — judge you by the metrics you track, the order in which you track them, and how clearly you present them, I think it’s very important to put real thought into how you want to present your company’s one-slide financial and key operating metrics.
As both an author and analytics enthusiast, I also believe in minimalism and reader empathy. We should neither bury the reader in facts nor force them to perform basic calculations that answer easily anticipated questions.
I always try to remember this Blaise Pascal quote (which is often misattributed to Mark Twain):
I would have written you a shorter letter, but I did not have time to do so.
So, in this spirit, let me offer my one-slide SaaS startup financials and key operating metrics dashboard, which captures all the key high-level questions I’d have about any enterprise SaaS company.
While this is certainly not a complete set of SaaS metrics, it provides a great summary of the state of your annual recurring revenue (ARR), your trajectory, your forecast, and your performance against plan. Most important, perhaps, it shows that you are focused on the right thing by starting with 5 lines dedicated not to TCV, bookings, or GAAP revenue, but the key value driver for any SaaS business: ARR.
If you like it, you can download the spreadsheet here.
The beauty of this is the simplicity. And as the leadership team grows in their financial acumen, they can add to this or even modify.
I like that you included BOTH forecast and plan. Are you defining PLAN as the original target at the beginning of the year?
Thanks. Plan to me is the most recently approved plan-of-record. I generally shoot for a December approval and July revision, so in this case it would probably the 2016 mid-year revised plan. By the way, I also present future plans in this same format … 2017 Proposed Plan and 2018 and 2019 Financial Model.
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This is great, thank you.