Last version published: 06/10/2017 17:21
Publication number: ELQ-82725-4
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SaaS Financial Fundraising Excel Model Template
The ultimate SaaS fundraising excel model template. Incredible power, simply done.
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Fundraise and total operational control of your SaaS company
How the SaaS financial model was built
The SaaS financial model is a combination of the best aspects of multiple exceptional fundraising models which have closed single and double digit $ VC rounds, and learnings over many years of model building. All the learnings from top tier VCs have been included (The KPIs and charts they want to see). The best approaches have been combined and improved upon to deliver the definite model for founders who are going to execute big results.
We’ve drawn on our years of experience operating startups at early and growth stage to create something that just works. There is not a needless level of detail, nor a sparsity of assumptions to illustrate a depth of logic and insight. Everything included has been considered as to whether it adds value and if investors will “want to know and ask.” The structure also enables founders to change the model to fit the exact needs of their startup (particularly in revenue forecasting).
Benchmarking for your financial model
This is a fantastic presentation to use when forecasting in your financial model and making sure your metrics are in line with reality. Flick through the deck as you work through each section of the model and check you are trending towards these numbers. It's perfectly ok for your numbers to look a little crazy in the early days (When you have a few customers and little revenue, no metrics/ratios will make sense). What matters is how you evolve.
Key features of the SaaS model:
- Right timeline: 36 months of forecasting with 3 annual summaries
- Flexible for actuals and forecasts: Actual and forecasts with sheets which combine your numbers into a combined P&L to the exact month magically
- Staff: Manual and automated forecasting of staff. For most staff you can decide the month your staff will join (Such as developers or a CFO) and the month they are terminated. Furthermore you can set a date and salary increase (such as post-series-A) and salaries will increase on that date, and adjusted for bonus and payroll taxes and benefits. For support, recruitment and channel sales staff, your staff requirement flexes as you scale automagically to your desired assumptions
- Expenses: Granular assumptions to rapidly forecast your G&A, S&M, R&D and CAPEX. COGS expenses have their own sheet for payments and hosting expenses
- Cohort approach to forecasting: A truly incredible cohort based forecasting model without the work. Input a few assumptions and you can get monthly cohorts for customers and all forms of your revenue, for both MRR and Bookings/Billings
- Annual and monthly revenue: Many SaaS companies offer a discount for purchasing one year upfront, whilst also allowing customers to pay monthly. The calculations to make this work are complicated because of renewal periods and differences between your accounting and your cash position. The model allows you to add simple assumptions of monthly vs annual customers and does all the heavy lifting with incredible accuracy. It’s as simple as adding your high-level assumptions and sitting back to look at the results
- 3 pricing packaged: Basic, Premium and Pro with granular assumptions for each. Each package is calculated individually
- Comprehensive marketing plan: Forecast your entire marketing plan across paid, organic, email, blog and social media channels with no heavy lifting. All the relationships between the channels are deeply integrated so social rebroadcasts will result in newsletter sign-ups
- Channel sales: An easy to use schedule to forecast customers from both CPL and CPA partners. Channel Sales staff scale to your number of leads they can handle each month
- 2 Detailed KPI sheets: Full dashboard of all your KPIs for both general operations and all your SaaS metrics
- Charts: Breadth of beautiful charts to graphically explain your business
- Full blown P&L: Detailed, logical P&L explaining your business model step by step
- Summary P&L: Easily copy and paste your summary P&L into your pitch deck
- Sources and uses: Get insight into your fundraise requirements. Three beautiful charts to copy paste into your pitch deck
Technical features of the SaaS model:
-> Fully integrated and automated model: Get insights from KPIs if your assumptions make sense so you look like a pro with a plan
Standardised structure on each sheet: Every monthly calculation in the SaaS financial model starts in the same column which makes it easy to audit
-> Consistent: Consistently colour coded cells for formulas, links and assumptions applying best practice from global, top-tier investment banks. All cells are perfectly aligned
-> Comments: Comments on all assumptions so you know what to input and why
-> No hard coding: No hard coded numbers in any formulas
-> Open editing: Model is not locked, you are free to restructure as much as you like!
-> Clear linking: Links to each sheet are always at the top of each sheet to track and understand where assumptions come from and what sheets are driving another one
-> Separate actuals and forecasts in your P&L: Easily update your model monthly during your fundraise without fuss. Combine months by simply adding a date of your choice
-> Dynamic year end: Set your year end at a month of your choosing. All annual adjustments are made automatically with powerful formulas
Accounting: Cash and revenue accounting
-> Forecast period: 36 months of forecasting with 12 month summaries for each forecast year
-> Change assumptions every month: Make the SaaS financial model assumptions as simple or complicated as you like. Every assumption is mapped out on it’s own row. For example, any month you want to increase your Basic package price, simply change that month. If you want to keep your assumptions linear, the formulas support that decision automatically and by standard
What do I need to use this model?
- You need Excel. Google Sheets is never to be used for a fundraising model as the functionality is limited.
- This works on both Mac and PC and was built on both.
- You should install the ‘Solver Add-in’ and ‘Analysis TookPak’ if you do not have it installed already. These are free and standard Microsoft add-ins
- We do not have circular references so there is no need for ‘iterations’ in this model, but in case, turn them on in your calculation settings.
- This is not needed, but if you want to be a boss in Excel, download http://www.asap-utilities.com/. There are some really useful tools if you need to build models. It only works on PC though (as do the other cool tools).
This model applies best for normal SaaS startup with monthly and annual payments (with or without discounts)
Who this is for:
Are you building the next top SaaS startup? Need to provide a AAA SaaS financial model for Venture Capitalists to secure a big round or just understand your operational requirement in detail for strategic planning? Do you need a detailed model to understand every key aspect of your business? This is it.
This model is for all SaaS companies that have a non-enterprise business model. If you charge monthly or annually through scalable means, you are good to go.
If you are an enterprise companies with ARPA in the tens of thousands, closing customers with an external sales force, then it doesn't have a module for that. Another model will be added soon that enables you do pick targets and reverse your growth through sales teams.
Who should use this model
The model is very detailed and powerful. There is nothing available on the internet on this level. It assumes you have an understanding of SaaS and for navigating excel. Every effort has been made to make it simple for a founder to get impressive results without having to be advanced in model structuring (We did all the hard work).
You don't have to do ANY modelling to use this model. You just need to be able to fill in the assumptions boxes. Only if you need to restructure the model due to you having a special business model will you need to be advanced level.
The ideal user:
-> Building a normal SaaS company, NOT an enterprise one
> Is comfortable with numbers and wants to have control over their model with fairly granular assumptions, or rather the ability to change pricing every few months if they wanted to...
-> Is at inception to around series-B stage of fundraising. The model doesn't present years of historical data, which may not be perfect for later stage companies. You could easily add this though. The focus is on 3 years of forecasts and the year to date actuals
->Likes to impress and enjoys a beautiful model!
-> Wants to show investors they applied a very vigorous, logical approach to their forecasting and operations
-> Wants a model that runs rings around hotshot bankers without the crazy cost
-> Needs a logical, consistent model they can use customize for their own purposes (Ideal)
The sheets in the model:
1/ Formatting: Input your model start dates and basic formatting assumptions
2/ P&L Forecast: Detailed forecast P&L of your startup. Output of all your assumptions
3/ P&L Actual: This is the P&L of your actual numbers. Put in your actuals and they get represented in your combined P&L
4/ P&L Combined: This combines the forecast and actual sheets together
5/ P&L for Deck: This combines the summary forecast and actual sheets together for the first 12 months and for 3 years annual to insert in your pitch deck
6/ KPI: A detailed summary of all your KPIs
7/ Source and Use: Use this to figure out how much to raise and to present your 'sources and use' of money you raise in your 'ask' slide
8/ Charts-General: Summary of charts from across sheets other than SaaS metrics
9/ Charts-SaaS: Charts of Saas metrics. All the ones David Skok (Matrix) recommends are in it
10/ Calcs - Monthly: Calculate the normal, monthly portion of your MRR/Bookings
11/ Calcs - Annual: Calculate the annual, up-front payment portion of your MRR/Bookings
12/ MRR & Cust Summary: A summary of your MRR and Customer calculations (The calculations in the monthly and annual sheets are long)
13/ Pricing: Input your pricing assumptions for revenue. Pick from different business models
14/ Expansion Revenue: Calculate the expansion revenue using either by an additional seats, or new modules basis
15/ Staff: Forecasts for all staff (Other than customer support related staff), and all the related staff and G&A costs
16/ Expense calcs: Calculates your customer care related and technology costs, which aren't calculated directly in the Staff sheet
Professional Services If you have professional services, calculate the cost and revenue. Can use if you want to have onboarding costs alternatively
17/ D&A - Tax: Calculate your depreciation (there is no amortisation) and your tax simply
18/ Marketing: Centralises the marketing data and applies conversion rates to create 'registered users' of your site (Which then buy)
19/ Paid & organic: Organic growth and paid traffic to the site. Feeds to the traffic build in 'Marketing'
20/ Email: Calculates the sign ups to your email database. Feeds to the traffic build in 'Marketing'
21/ Blog & Social: Calculates the traffic that comes from promotion activities by blogging and social media. Feeds to the traffic build in 'Marketing'
22/ Channel Sales: Calculates the leads from channel partners and supporting staff csots. Feeds to the traffic build in 'Marketing' under leads and in the staff costs
23/ Benchmarks: Some publicly available SaaS metrics to use to benchmark your assumptions as an FYI
This model is not for enterprise sales with sales driven by staff. This only uses sales staff in servicing channel sales
Who might find this model hard
We don’t offer returns, but want to make sure you succeed; so if you are new to excel and SaaS and aren’t willing to put in some work to learn, this model might not be for you.
-> If you don’t know how to use a (SUM) function you may find it overwhelming if you need to understand every detail. Every line has been broken up to be logical to understand, so with a little diligence anyone can be a total boss.
-> If you don't really understand SaaS, it might be too much
-> If you don’t understand how marketing works (such as what CTR is), then this model may have too much detail for you to handle.
What this model doesn’t do:
There are a number of additions which could have been added to this model and have purposefully not included. If you have seen models with other frills, trust there are reasons why they have not been included. Let’s go through some of these so you understand:
-> Traditional cash flow statement and balance sheet: There is a cash based accounting section to understand your actual cash burn. Investors don’t really care about your BS and CFS sheets like a PE company would. They care about the logic of your model to show it is thoughtful. They care how much revenue you will generate to size the market opportunity (how they will get rich) and how ambitious you are. The BS and CFS are useful at growth stage companies when there is a line of sight on meaningful forecasts- early stage you don’t really have many reliable numbers so they serve to create information overload
-> Cap table: It is best to have this separately so it is a distinct conversation rather than bundling it with your forecasts
-> DCF and valuation: Having a DCF at early stage is totally ridiculous, particularly as the assumptions don’t make sense (What's your discount rate? Show me how to do your WACC...). A DCF is also not how VCs value early stage companies. Including a DCF or multiples is not how you want to approach a valuation discussion with investors and I think can actually harm you in negotiations. I recommend not putting a valuation in the model
-> Complicated paid marketing assumptions: We want to show logic not needless complexity. There is some very smart logic in calculations for emails and the like, but we try keep the number of assumptions down so you can discuss what’s important (Like CPC and budget, not keyword volumes)
-> Growth modelling: If you are at growth stage, you will have a lot more visibility on your actuals and have more historic reporting. This is not the best approach to modelling and fundraising for you. But the cool thing is, if you know basic excel, it's easy to add columns for your actuals if you like
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