H1 is done, what to do in H2? #79

Jason Kirby
Jul 2, 2024

What's Below in Issue #79:

📰 - Mid-year review: metrics you need to track

📊 - SAFEs vs priced rounds

🎙️ - Podcast #47 w/ Wen-Wen Lam; surviving a crisis as a founder

💵 - Premium startup resources

🆓 - Free startup resources

-------------------------------------------------------------------------------------------------------------------------------------------------------------

How Much Could You Sell Your Company For?

If a private equity firm or strategic acquirer made an offer to you today, would you take it? Would you know if it's a fair deal? Are you in the position to close a deal?

Getting acquired could transform your life.

Founders don't realize that it usually takes 12-24 months to prepare a company for a successful exit, the sooner you have a plan in place, the greater the potential outcome. 

If you want to get acquired, we can help. Book a free discovery call with our team of experts to explore your options and discuss getting a plan in place that could change your life.

Book a Free Discovery Call

-------------------------------------------------------------------------------------------------------------------------------------------------------------Data Corner

dc

SAFEs Vs Priced Rounds in Early-Stage Fundraising

SAFEs (Simple agreement for future equity) have become increasingly popular options for early-stage investors since they originated at Y-Combinator. Why? Because they really are simple and more founder-friendly than convertible notes.

Just how popular are SAFEs? As you can see above, they have seriously increased as a vehicle for early-stage funding, and not just pre-seed, but in seed rounds of $5M+! There is a significant difference in priced rounds vs SAFEs in pre-seed vs seed rounds with the earlier investments showing a marked preference for SAFEs.

-------------------------------------------------------------------------------------------------------------------------------------------------------------

Happy New Month!

June is behind us, which means the first half of the year is done and we've kicked off H2 2024. Did you meet your metrics for H1? What have you been tracking? What do you need to start tracking?

I will share the key numbers you need to be looking at and tracking going forward. Yes, it may be more on your already full plate but these metrics really do matter and help you hone in your focus and scale.

Key Metrics You need to track 

The Revenue Model is your north star. It shows incoming customer revenue and its predictability/sustainability. Calculate MRR, ARR, churn, retention, and expansion. It forecasts future revenue based on trends, evaluates decision impacts, and reveals what's needed to hit growth goals - the core model for understanding and growing subscription businesses.

Don't forget about the Cash Burn Model - cash is an absolute must for survival. This report reveals how much money you're burning through just to keep operations running, and how long you can coast before going bust. The key metrics here are burn rate, runway, and breakeven point. Keeping tabs on this is crucial because you always need to be conserving cash and know precisely how much runway you have left. Trust me, it only gets harder to manage the cash flow once you hit product-market fit or enter a hypergrowth phase.

For SaaS companies, the Cohort Retention Report can make or break you. This shows how well you're able to keep customers engaged and satisfied with your product over time, and whether you can keep them on board or coming back. To calculate it, you'll segment customers into cohorts based on characteristics and track the retention rates for each group. Analyzing retention this way matters because the rates can vary drastically between new sign-ups and long-term users. Viewing it through a cohort lens allows you to identify valuable trends, compare performance between segments, and ultimately figure out how to improve your overall retention.

Finally, the Acquisition Funnel Report is all about capturing those all-important new customers that fuel growth. This report outlines each stage of your funnel and tracks three crucial metrics: volume of prospective customers, conversion rates between stages from awareness to retention, and the time it takes to convert to the next step. Why is this vital? It gives you a comprehensive understanding of every lever in your funnel so you can analyze which ones drive the highest yield. From there, you can prioritize optimization of the highest-impact levers to accelerate new customer acquisition and revenue.

The 4 Key Reports Every SaaS Founder Needs to Track

Also good to have...

Your focus will definitely be on the north star (probably revenue) but there are plenty more data points that can be valuable to track; especially if you are seeking funding or have to report to investors.

I picked out a few of the ones that I reckon could make your journey easier. From a customer POV, apart from measuring retention, these figures can give you an idea of where your focus should lie;

  • Customer Lifetime Value (CLTV or LTV): This predicts the total revenue a business can expect from a single customer account; essential for assessing/forecasting long-term profitability.

  • Customer Acquisition Cost (CAC): How much does it cost you to acquire a new customer, including marketing and sales expenses? Tracking this helps you understand the efficiency of the sales and marketing strategies.

  • Churn Rate: What % of your customers stopped using your product last month? Last quarter? H1 2024? Reducing churn is critical for sustainable growth.

Other interesting metrics include tracking your active users in different time frames, and data like NPS give you a feel for how happy your customer base is- definitely interesting to have that info!

Was this newsletter helpful?

👍 or 👎

-----------------------------------------------------------------------------------------------------------------------------------------------------------Founder to Fundraiser: Wen-Wen Lam's Wild Ride Now in Episode 47

Youtube Thumbnail-1

 

In the latest episode, I speak with Wen-Wen Lam, former founder of NexTravel and formerly a partner at Gradient Ventures. Wen-Wen takes me through her entrepreneurial journey, from her early days at LinkedIn to founding and scaling NexTravel to $100 million in bookings before the COVID-19 pandemic disrupted the travel industry.

Wen-Wen provides invaluable insights into the challenging process of being acquired and selling a company during a crisis, as well as her new perspective going from operator to investor. 

Check It Out

-------------------------------------------------------------------------------------------------------------------------------------------------------------

Free Fundraising Resources

🤓 - Free pitch deck reviews - Submit your deck
💸 - Access working capital fast - Explore options for free
😍 - Free list of AI Recommended VCs - Apply for free
👨‍💻 - Free fundraising coaching session - Schedule 15 minutes with us
📝 - Playbook for Negotiating Term Sheets - Download it Here
💽 - Playbook for Setting Up and Sharing Your Data Room - Download it Here
✉️ - Playbook for Sending Investing Updates - Download it Here

Premium Resources

Your pitch deck built by VCs and designers

🗓️ - Book a one-hour private capital strategy call - Book Now
💫 - Pitch deck design services for founders by VCs - Decko
💼 - Startup Legal Services - Bowery Legal
📚 - Startup Friendly Accounting Services - Chelsea Capital

Download Your List of Targeted Investors:

  • Access to VC firms' team tabs to see active partners of the fund & their LinkedIn
  • Navigate a VC's portfolio to see relevant portcos or competitors, quickly find their founders on LinkedIn to connect with them, and request warm intros 
    A downloadable CSV with the investor emails & LinkedIn URLs
  • Ability to filter your matches and adjust your profile
  • LiteCRM to track your progress
  • Request intros to VCs directly through the platform
  • Get our fundraising guide on how to increase your odds of getting a meeting
  • Upgrade to lifetime access (one-time fee of $497) and get a free coaching session

                                                                                     Upgrade Now for $59/month

-------------------------------------------------------------------------------------------------------------------------------------------------------------

Let's stay in touch:
Jason Kirby

Read On