Investing in SaaS Ventures (Part 5): The 5 Cs of SaaS Finance

The Hyper Team @ Venture Hype | Apr 14, 2010

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This is the final installment of our series on Investing in SaaS Ventures. Which was born from a question and suggestion from a dear reader, Taliba M.

Taliba is a new angel investor who’s ready to make her second investment. She wants to place a bet on a SaaS startup but feels that she can’t make an informed decision due to her lack of experience with SaaS ventures. She wants to know what we think and we gave her our thoughts in Effective Ways to Invest in the Unknown.

Below is the rest of the series:

* This series isn’t investment advice and it’s by no means a comprehensive guide to SaaS. Read Effective Ways to Invest in the Unknown for the purpose of this series, which is purely informational.

• Investing in SaaS Ventures (Part 1): The Basics provides a brief overview of SaaS, why SaaS companies rock, and why it’s costly.
• Investing in SaaS Ventures (Part 2): Capital Requirements looks at Enterprise vs. Consumer SaaS and the capital required to get them to liquidity.
• Investing in SaaS Ventures (Part 3): Monetization Models outlines how SaaS ventures make money and some pros and cons of each model.
• Investing in SaaS Ventures (Part 4): Evaluating SaaS Startups finds out how seasoned investors select potential investees and explains 2 industry terms that you need to understand before looking at the key metrics in Part 5.

This is the last article in the SaaS investment series (see the others in the linkage quoted above). This one covers what is probably the most base metrics that a SaaS company should know. I for one am looking forward to being able to quote these as something other than 0.