Digital Companies and the Limitations of GAAP Financials
Traditional GAAP financials have some limitations when presenting the value of digital companies. Learn about these limitations, and what to do about them.
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Traditional GAAP financials have some limitations when presenting the value of digital companies. Learn about these limitations, and what to do about them.
The traditional income statement has been around for decades. While it has its uses, it’s not specifically designed for a SaaS business. What format would a SaaS-optimized income statement have? SaaS Capital has an example.
If your business has been mulling a move to the subscription business model, CFO Magazine has an article for your consideration.
Struggling to creating a forecast model? Fortunately, there is no need to reinvent the wheel. Here are 3 links to some SaaS-specific forecast models to help you get a jump on things.
The best thing about the SaaS business model is the potential for much greater company valuations. SaaS companies are consistently valued much higher than either professional service or licensed software companies (possibly 5 to 7 times more, depending on the business model and market conditions). Perhaps you have considered transitioning to a SaaS model. Here are 5 things to keep in mind.
SaaS metrics like MRR and Churn get lots of attention. Gross Margin might not have the buzz of other metrics, but it’s just as important to monitor. In fact, Gross Margin is commonly used among high-level analysts when they evaluate the strength of your business.
Should SaaS businesses capitalize software development costs? This is an area where common practice might differ from legacy GAAP.
How does an organization incentivize, retain, and reward key contributors? A common incentive is stock options. But what are stock options worth? The IRS cares about the answer much as you do. That’s where a 409A valuation comes in.
The subscription business model has many benefits. But managing subscription details for numerous customers is challenging. Software can ease the burden.
Start-ups need to secure funding to survive. But what are the expectations of the people you’re asking for cash? Here’s a summary of 3 articles about raising capital.