      cloudedjudgement.substack.com · 2024-01-12
      · 874d
    

Clouded Judgement: The 2021 Funding Reckoning and Path to Founder-Friendly Venture

The article argues that venture-backed companies raised in the 2021 ZIRP boom without achieving prerequisite milestones and must now honestly assess whether they have sustainable product-market fit or are "walking dead" on cash reserves. The author advocates for founders and boards to initiate hard conversations about realistic independent viability today while they have leverage, rather than face a compounded acquisition crunch in 2025 as multiple cohorts simultaneously seek exits.

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Metrics in this report

CAC Payback Period

39months

median

SaaS companies at scale (public comps)

Free Cash Flow Margin

8percent

median

SaaS companies at scale (public comps)

G&A Spend

17percent of revenue

median

SaaS companies at scale (public comps)

Gross Margin

75percent

median

SaaS companies at scale (public comps)

Median LTM Growth Rate

20percent

median

SaaS companies at scale (public comps)

Median NTM Growth Rate

13percent

median

SaaS companies at scale (public comps)

Net Revenue Retention

112percent

median

SaaS companies at scale (public comps)

Operating Margin

13percent

median

SaaS companies at scale (public comps)

R&D Spend

26percent of revenue

median

SaaS companies at scale (public comps)

SaaS Revenue Multiple - High Growth

15.7x NTM revenue

median

Companies with >30% projected NTM growth

SaaS Revenue Multiple - Low Growth

4.3x NTM revenue

median

Companies with <15% projected NTM growth

SaaS Revenue Multiple - Mid Growth

8.6x NTM revenue

median

Companies with 15-30% projected NTM growth

SaaS Revenue Multiple - Overall

5.9x NTM revenue

median

All public SaaS companies

SaaS Revenue Multiple - Top 5

17.5x NTM revenue

median

Top 5 highest-valued public SaaS companies

Sales & Marketing Spend

43percent of revenue

median

SaaS companies at scale (public comps)