This week, John Gallagher, partner at Element SaaS Finance, participated in the Future of SaaS Fireside Chat on the topic of Everything you Need to Know When Scaling Your SaaS Start-up. In it, John and Michael Bereslavsky, CEO of Domain Magnate, shared insight, advice, and answers to founders’ most pressing questions.
There was a great turnout of engaged audience members. If you could not make it, here are three key takeaways from the conversation in the hopes that they may inspire you and help you take your business to the next level.
1. Marketing Matters
Having a great product is the key first step, how you get it out to and in front of potential customers is the next mountain to climb.
A holistic marketing approach to raise brand awareness and capture the attention of future buyers is needed to make sure you are hitting all the right places. While paid traffic continues to be an ideal choice of marketing spend for most SaaS companies due to ease and scalability, the downside is the capital investment cost of acquisition ROI and sometimes diminishing returns as you scale. For savvy SaaS companies looking for solid returns and lower investment marketing strategies, an excellent place to start is SEO and content creation efforts that provide valuable insights for the target audience.
While there are many different channels in marketing, it was recommended to test multiple strategies, measure performance, and identify the channel that gets the most significant results. From there, focused spending in proven and repeatable ways will help move the needle in the right direction.
2. Be the Kind of Business Lenders Look for
While VC and venture debt providers work and provide capital in different ways, they both look for similar business characteristics before investing. Here are a few examples that make a business attractive to a lender.
• Proven Leadership team
• Strong financials
• Sticky product
• High Retention/Low Churn
• Steady revenue and growing customer base
• Growth/Expansion strategy
3. Equity and Debt – Timing is Everything
Finding the right finance at the right time is a critical piece of the jigsaw, especially in a world where inflation and economic uncertainty is increasingly an issue. Many founders struggle to understand the finance options that allow them to minimize dilution and retain as much of their ownership stake as possible. Equity can be an excellent option for founders early on. However, the timing and terms on which equity is raised are crucial. Debt can serve as a way for founders to minimize dilution and bridge the funding gap to grow and scale their business to achieve the highest valuation when the time for equity presents.
These are just three takeaways from the conversation, but there’s plenty more content available to help guide you on your finance journey. Visit our Insights for more tips, recommendations, and best practices.