If you have a B2B business that negotiates deals directly with your customers, then I’ll bet you’ve got headaches to do with money. Sales call followed by proposals… Rejected and then renegotiated… All hoping that in the end, you can close a big deal that really moves the needle. Only to realize that getting the customer is just half of the battle!
“If only we had money, we could…” It’s a story I’ve heard a thousand times. Startups heaving a sigh, wishing they had investors to fund the awkward early stages. Scraping to get your software in shape… Working 60+ hour weeks… Can’t afford to hire people so you’re wearing every hat for every department… But the dark side of receiving VC funding is that you lose a massive slice of your company. It can be VERY expensive.
“How do you maximize your revenue?” It’s the question that everyone wishes there was an easy answer too. No, I don’t mean that as a thought-provoking chin-stroking question to ponder from the armchair. I mean how do you actually do it? How do big businesses know the right steps - backed with data - that are going to blast them to their revenue goals and beyond? Answer:
Recently one of my coaching clients exited his SaaS company for $90MIL. That was on $860K in monthly recurring revenues. Literally 100X his MRR became his selling price. In case that isn’t clear... He made $90 million in a single sale, walking freely into an early retirement. There is some serious money to be made in a well-built SaaS... When you hear stories of overnight millionaires, it’s often some tech founder who exited their company for a huge sale.
Here’s a hypothetical for you: If your business suddenly took off - I mean like accidentally monopolizing your market and seeing exponential growth overnight - would you be able to handle it? Or would you crumble into a stressful wreck?
When I was building my company, Flowtown, I remember one of our potential investors talking about Expansion Revenue. I thought “Uhh… okay. What the heck is that?” You don’t wanna learn about this stuff FROM potential investors. Staring at them wide-eyed when they outsmart you doesn’t exactly scream ‘good investment’. But now I know how to use upselling to increase customer retention and leverage Expansion Revenue. It makes a real difference. I’ve used it in my own businesses and now
Years ago I attempted to raise money for my first company, Flowtown, with my co-founder Ethan. You know what we did? We cold emailed investors. We figured “We have a startup, they invest in startups... so surely they want to hear from us”, and hoped our confidence would cut through the noise. It didn’t work. Obviously. They didn’t even bother to reply. So we hunted for advice and came across Naval from AngelList. Everything he said about fundraising just… clicked.
I’ve seen this happen before… A business that’s already growing decides to start their own SaaS. It always seems like a great idea. You’re already serving your customers, you know their problems, and you’ve got company resources to work with... So it’s gotta be easier than starting from scratch, right?
Funding. The day will come when you need it for your SaaS. You’ve grown your startup, got a brilliant team and you’ve got a great product you can actually take to investors as proof. Now it just needs that push. But before you even think about trying to fundraise or approach investors, you’ll need to know how to value your SaaS and decide on how much you should raise.
And it goes like this: How much is it? - It's not that bad… Look, it's simple. Just give me a number. OK? - It's 20% - not that bad, right? WOW… Your churn is 20% monthly? *issues a small prayer to all the SaaS gods* The above is a conversation I recently had with a potential coaching client… GOOSEBUMPS! Let me put this into perspective...