February 2021

Elements of Finance

The latest news, tips, and techniques in SaaS finance.

Why Two Startups Chose Debt Instead of Equity Investment

It’s always interesting to hear stories of founders who choose debt over equity and vice versa. Here are two great use cases for debt, and Max Simkoff, CEO of States Title, hits the nail of the head with why more companies aren’t choosing debt:

“The reason many companies don’t pursue debt financing is because they feel they may not have a clear path to profitability in the time frame in which they would need to pay the debt back.” - Max Simkoff

Recently, the surge in SaaS finance offerings has allowed a wide variety of SaaS companies to choose debt. However, there are a lot of options and you need to be careful to choose the correct one for your business, which brings us to our next point:

How to Identify the Best Financing for Your Startup

Successfully financing a company requires you to take the right amount of money, at the right time, and deploy the money in the right places. In order to do this properly, you need to be strategic about what type of capital you take.

Running Software-as-a-Service Securely

CFOs touch more parts of the customer journey than anyone else in the business. They have access to data across the company and should be using that data to improve your business throughout the year.

One of the largest threats to a SaaS company’s financial wellbeing is data security. Throughout the last year we’ve seen a number of data breaches and numerous funding announcements for companies specializing in everything from network security to data protection. CFOs and finance teams need to budget sufficiently to maintain security best practices. Looking for a good place to start? Try SOC 2 Compliance.

What To Expect From The Rapidly Growing SaaS Market In 2021

Before COVID-19, the SaaS market was in the process of doubling in size from 2017-2022 according to BCC research. Due to the pandemic, many businesses within SaaS had down months, increased churn, and slowed growth. But as a whole, the SaaS market stood out in 2020 as a stable, growing, and profitable business model.

“All the advantages of SaaS have been magnified by Covid-19 – companies need turnkey digital solutions that allow all employees to communicate and collaborate in a consistent way while minimizing upfront and ongoing costs.“
- Andrew Butt, Co-founder and CEO at Enable

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Elements of Finance

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