Introducing "The Financial Folio"
We are reporting the release of The?Financial Folio, Profitual's monthly financial insight update!?
Whether you're a fintech enthusiast, a founder seeking financial wisdom, or a VC on the lookout for the next big thing, The Financial Folio is the essential guide to navigating the dynamic intersection of finance and technology.
The Financial Folio is your source for successful financial planning, investment strategies, and benchmarking, all while enjoying a touch of humour and creative insights.?
TRIVA!
Which of the following was identified as the most common challenge holding back FP&A efforts by finance leaders in a recent survey?
A) Lack of skilled personnel
B) Insufficient budget allocation
C) Inadequate systems and tools
D) Inefficient processes and workflows
Check out the answer at the end of The Financial Folio!?
SaaS Startup Benchmarking Insights
How are you holding up in the industry??
Check how your statistics compare to averages in the industry with these three top startup metrics.
Runway
After successfully raising a round of funding, a company should aim to have 18 - 20 months of runway. Keep in mind it takes 6 months on average to get to the next round of funding, so be sure to give yourself enough operating runway to cover that 6-month period.?
Gross Margin
The gross margin shows the efficiency of revenue; for every dollar of revenue generated, what portion will be retained? SaaS companies should aim for a gross margin of 85% - 90%. Due to high upfront/initial costs, startups may not reach this in their first years. A reasonable goal is to aim for a gross margin within this range around the third full year of operating in the market.
Monthly Recurring Revenue (MRR)
As recurring customer revenue becomes consistent, financial forecasting gains accuracy and expense predictability improves. Tracking MRR is important as it evolves into Annual Recurring Revenue (ARR) with maturity. The amount of MRR or ARR you achieve will differ based on what you're selling. There's no exact money target to aim for, but it's clear that higher values are better. This is because they directly affect the main thing investors care about: how fast your recurring revenue is growing.
Article Roundup
Suggested Reads
Finding the A in FP&A from Robotic Process Automation
Automation is no longer the replacement of humans with robots or the digitization of all documents. It is now streamlining processes that enable businesses to operate more efficiently through insightful analytics.
Understanding FP&A Roles at Growing Companies
What the various roles in finance mean at a startup, and how to think about hiring for finance as companies grow.
Should I Raise Using a SAFE? An Atlantic Canadian Perspective with CEO, Ray Fitzpatrick
So, you’re a startup raising your pre-seed round, which (based on the date from Carta) almost assures you that you’re going to fall into that 80% of startups that use a SAFE to raise your investment, right? It really depends on whether you intend to raise from local Angel investors and if they have any interest in the tax credits that are offered by local governments.?
TRIVIA ANSWER!
Answer: c) Inadequate systems and tools, with 61% of finance leaders identifying it as the most pressing challenge in a recent survey.
How'd you like this newsletter?
Want more insights?
We update our socials every week!